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INVESTIGATION OF THE NEW YORK, NEW HAVEN & HARTFORD 
AND GRAND TRUNK RAILROAD AGREEMENT 


HEARINGS 

BEFORE THE 

COMMITTEE ON RULES 


$ 7 y* 


1. 5, HOUSE OF REPRESENTATIVES 

ON 


H. RES. 718 


DECEMBER 10 and 11, 1912 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 
1913 





























r 




* 

















D. OF D. 
JAN 13 1913 






















« 





























INVESTIGATION OF THE NEW YORK, NEW HAVEN & HARTFORD AND 
GRAND TRUNK RAILROAD AGREEMENT, 


Committee on Rules, 

House of Representatives, 
Washington, D. C., December 10, 1912. 

The committee met at 11 o’clock a. m., Hon. Robert L. Henry 
(chairman) presiding. 

STATEMENT OF HON. GEORGE F. O’SHAUNESSY, A REPRESENTA¬ 
TIVE IN CONGRESS FROM THE STATE OF RHODE ISLAND. 

The Chairman. Gentlemen, the committee has been called together 
for the purpose of having a hearing on House resolution No. 718, 
introduced by Mr. O’Shaunessy. Mr. O’Shaunessy, the committee 
will be glad to hear you. 

Air. O’Shaunessy. Air. Chairman and gentlemen of the committee, 
I have thought it wise, in view of the many who will speak here to-day, 
to put the greater part of my remarks in writing. 

The primary purpose of my resolution calling for the appointment 
of a special committee of seven Members to be selected by the House 
is to investigate the causes which lead to the cessation of work hi 
Rhode Island and other New England States of railway construction 
work by the Southern New England Railway Co., which was char¬ 
tered for general railroad purposes by the Rhode Island General 
Assembly on April 12, 1910. I might say I was a member of the 
Rhode Island Legislature at that time. The coming of the Southern 
New England Railway Co. into New England was hailed with un¬ 
bounded joy by people who had suffered long from the grinding 
monopoly of the New l r ork, New Haven & Hartford Railroad Co. 
The granting of the charter to the Southern New England Railway 
Co. was bitterly fought by the New York, New Haven & Hartford 
Railroad Co. The people of Rhode Island, however, gave full faith 
and credence to the statement made by the late Charles AI. Hays, 
president of the Grand Trunk Railway when he said: 

When any railroad or individual can find one atom of evidence that the good faith 
of the Grand Trunk or the word of its presidents has ever been broken, it will be time 
for a monopoly to breed suspicions of bad faith. But if those enemies of progress who 
have decided upon a dog in the manger policy in Rhode Island, want such slanders 
to bear fruit, they must seek some other soil'than the reputation and record of the 
Grand Trunk Railway. 

The charter was accordingly granted, and the Grand Trunk Rail¬ 
way, after overcoming legislative obstacles in New Hampshire and 
Massachusetts interposed by the New York, New Haven & Hartford 
Railway Co., and which obstacles might be looked upon as a fulfill¬ 
ment of President Alellen’s declaration, “I will take care of the new 
road outside of Rhode Island,” started its work amid general rejoie- 



4 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


ing and the fond expectation that a real rival had at last challenged 
the monopolistic supremacy of the New Haven road. President 
Hays of the Grand Trunk went to his death on the Titanic, and it 
appears that honor died with him so far as sacred promises and 
pledges were concerned. A generous people whose Statenas been torn 
wide open have been outrageously betrayed. The photographs 
which 1 show you for inspection tell the story more eloquently than 
any words of mine. The diabolical hand of a monopoly which brooks 
no interference is revealed in an abandoned project on which 
$1,500,000 had been spent, and on which a total expenditure of 
$4,000,000 had been contracted by way of damages, condemnation 
suits for involved property, and repairs. Adding insult to injury, 
the autocratic president of the New York, New Haven & Hartford 
Railway Co., in explanation of the abandoned work, is reported to 
have said on November 12 of this year: 

I have no knowledge of the discontinuance of the work on the Southern New Eng¬ 
land Railway about Providence, and, if work has been discontinued, it has probably 
been for some local reason, the weather, financial, or some reason of that kind, and 
of which I am not advised. 

This statement was made in the face of repeated conferences 
which had been held between Mr. Chamberlain, the president of the 
Grand Trunk, and Mr. Mellen, the president of the New York, New 
Haven & Hartford Railway. To the inquiries of indignant city 
and State officials impudent answers were given by Mr. Chamberlain, 
who shouldered the burden of explaining over to Mr. Fitzhugh, 
the president of the Southern New England Railway Co. 

A striking coincidence of the changed attitude of the Grand Trunk 
officials is the recent visit to London of J. Pierpont Morgan, who no 
doubt conferred with the executives of the Grand Trunk Railway 
in that city. 

Mr. Wilson. Mr. O’Shaunessy, before you go any further, will you 
kindly tell us the condition of this railroad now ? We are not familiar 
with it; at least I am not. 

Mr. O’Shaunessy. Mr. Bliss, the chairman of our public utilities 
commission, is more familiar with that aspect than I am, and I 
thought I would leave the matter of the physical situation to him 
and the mayors of the cities through which the railroad was laid out. 

Dr. Foster. You mean in reference to these pictures ? 

Mr. O’Shaunessy. Yes. 

Dr. Foster. Have they abandoned this work? 

Mr. O’Shaunessy. It has been abandoned; yes. 

Twenty-three hundred men who were engaged in the construction 
work of the Southern New England Railway were laid off on 24 hours’ 
notice. On November 18 of this year 360 carloads of new steel rails 
and fastenings, valued at over $500,000, arrived at Palmer, Mass., 
consigned to the Southern New England Railway. The absurdity of 
the financial stringency excuse is apparent when one realizes that the 
Grand Trunk is continuing its labors in the West and has engaged 
6,000 men in its railroad race to the Pacific Ocean, at a tremendous 
expenditure. 

This suppression of corporate rivalry by the New York, New Haven 
& Plartford Railway Co. is characteristic of that road’s management 
under President Mellen. His gobbling up of railroads, trolley lines, 
and steamship lines at exorbitant figures, which can mean nothing 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 5 


short of a reduced public service, have left one of the richest territo¬ 
ries in the world at the mercy of his absolute and domineering grasp. 
I contend that it is time for a complete and thorough investigation, 
not only of the recent exhibition of an engrained and vicious practice 
but of all the transactions on the part of this railroad company winch 
has given to the people a monstrosity of a water-logged corporation 
with a corresponding diminution of effective public service. The 
instance alone of the purchase of the Rhode Island trolleys for 
$24,000,000, an advance of $15,000,000 over the capitalization of 
these lines by their original exploiters is a sample of the Mellen finan¬ 
ciering, which finds its true reflection in antiquated rolling stock, 
successive wrecks, lower prices for its securities, and a gulled public. 
Some other enlightening transactions are noted in the purchase by 
the New Haven road at $86 a share of the stock of the Bennington 
& North Adams Street Railway Co., which had never earned a dollar 
and which later went into insolvency; of the purchase of the Berk¬ 
shire Street Railway Co. at $149 a share in the face of the fact that 
the stock had never paid more than 2 per cent; of the purchase at 
$320 a share for the stock of the Hartford Street Railway Co. which 
had not paid more than 6 per cent in any of the five years preceding 
the sale. These and many other purchases have been made by the 
New Haven road through bond issues. Heavy fixed charges on many 
millions of funded debt have been incurred in order to secure posses¬ 
sion of companies with doubtful earning capacity. The policy of this 
road had been to control and gobble up every plant that stood in the 
way of its absolute monopoly. 

Water competition has been eliminated by the New Haven road, 
so that the shipper seeking relief .from the excessive freight charges 
of the railroad finds himself in the clutches of the same corporation 
although he sends his freight by sea. Up to the time when the 
New Haven began purchasing steamboat lines there were 10 inde¬ 
pendent steamboat lines from New York to different ports in New 
England. All of these lines are now owned and controlled by the 
New Haven Railroad. The same extravagent policy was employed 
in the purchase of the steamship lines as in the purchase of the 
offending trolley lines. I am informed that as a result of this policy 
the New Haven road has failed in four out of the last five years to 
earn the dividends of 8 per cent which it has paid. Instead of its 
stock selling at 255, which was the quoted price a few years ago, it 
is now selling around 130. This road has increased its investment in 
road and equipment in the last 10 years by about $130,000,000, 
which is hardly more than one-third of its extraordinary increase 
in capital. Its capitalization has grown in 10 years from $87,000,000 
to over $450,000,000, an increase in the 10 years of $363,000,000, or 
416 per cent. 

Under efficient management one would look for steel cars and a 
safe roadbed. On the contrary, we find that from June 8, 1911, to 
November 17/ 1912, a period V 17 months, there ha,ve been nine 
wrecks, with casualties totaling 29 killed and 242 injured. The 
controlled trolley lines in Connecticut from 1901 to 1911 show a 
total of 358 killed and 10,981 injured. Most of the railroad wrecks— 
not trolley—have occurred on the main four-track line between 
New York and New Haven, upon which there are hundreds of 
rotten ties. During the 10 years ending June 30, 1911, a percentage 


6 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


of 285 new locomotives, 661 new passenger cars, and 26,084 new. 
freight and company cars, in addition to former equipment, have 
pounded over these old ties. What answer can be made to the 
action of Mayor Fiske, of Mount Vernon, N. Y., who picked with his 
bare fingers 36 rusty spikes within a quarter of a mile from the rotten 
ties of the New Haven road ? The highest American civilization is 
to be found traveling between New York and Boston and is left at 
the mercy of a corporation which thinks more of its strangulation 
of real and threatened competition than it does of human life. 

A special committee is needed to investigate the situation, against 
which a long-suffering public revolts. Standing committees charged 
with manifold duties can not do this great question ample justice. 
The rapacity of the New Haven road and its insolent treatment of 
reasonable demands have provoked an agitation which appeals to 
Congress for relief. Governors, mayors, civic bodies, boards of 
trade, manufacturers, and citizens in general, backed and sustained 
by the press, indorse this resolution and ask for a favorable report 
thereon. 

I want to read one affidavit illustrative of manufacturing condi¬ 
tions in Rhode Island as affected by the Grand Trunk situation. 
This is with reference to the Lonsdale Co., of which Mr. Robert I. 
Gammel is treasurer. 

The Lonsdale Co. is a Rhode Island corporation, chartered in the year 1834, which 
has built up a considerable business in cotton manufacturing and also in bleaching 
and finishing cotton piece goods. 

Its principal plant is at Lonsdale, R. I., where it operates two large mills and a 
bleachery. Lonsdale is a station located upon the Worcester branch of the New York, 
New Haven & Hartford Railroad Co., situated on the west side of the Blacks tone 
River. From this branch the Lonsdale €o. some years ago built a spur track to its 
mills and bleachery on the west side of the river, and at this station, known as the 
Lonsdale Bleachery Station, large quantities of freight are handled daily. The 
inward shipment of freight may be estimated at 300 tons per week and the outward 
shipment may be estimated at 300 tons per week also. The average number of cars 
leaving the Lonsdale Bleachery daily is 11 or 12. 

The Lonsdale Co. has no freight facilities except over the New York, New Haven & 
Hartford Railroad, and is obliged to pay the local rates which that company exacts. 
The Lonsdale Co. consumes about 30,000 tons of coal per annum, and the rate of freight 
charged by the New York, New Haven & Hartford Railroad for hauling this coal from 
tidewater to Lonsdale, a distance of 6^ miles, is 50 cents per ton. 

Late in the winter of 1910 we were advised that the Southern New England Railway, 
controlled by the Grand Trunk Railway of Canada, proposed to build a line from its 
station at Palmer to tidewater at the port of Providence. As it seemed to us that this 
railroad would give us new facilities for both inward and outward freight, we sought a 
consultation with its representative in Providence. In March of 1911 the vice presi¬ 
dent of the Southern New England Railway, Mr. Murdock, brought into the office of 
the Lonsdale Co. a layout of their proposed road, which indicated that they could 
give us a spur track at the Lonsdale Bleachery Station with facilities for handling 
freight much better than we have had from the New York, New Haven & Hartford 
Railroad. The connections which the Southern New England Railway had with the 
West, through the Grand Trunk, were direct, and he gave us to understand that they 
had arranged for docks in Providence which would give them advantageous facilities 
for handling freight at tidewater. 

Mr. Murdock brought in the plan of a layout for the new railroad which required 
the conveyance on our part of 1,315,219 square feet of land. This land the Southern 
New England Railway had the power to take by process of condemnation, under the 
charter it received from the State of Rhode Island. But the Lonsdale Co. entered 
into an agreement to sell this land to the railroad for a stipulated sum, and we have a 
contract signed by Mr. Murdock to this effect, dated August 24, 1912. Accompanying 
this affidavit is a tracing which shows the most valuable and important part of the 
Lonsdale Co.’s land taken by the Southern New England Railway. It also shows with 
a short red line the spur track which they proposed to build for handling freight from 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 7 

the Lonsdale Bleachery Station. The Lonsdale Co. has performed its part of its con¬ 
tract with the railroad company and has allowed the contractors of the road every 
facility for handling freight upon its tracks for the storage of machinery and tools and 
for the housing of its employees. The property of the Lonsdale Co. has been cut by 
the railroad for a distance of 2^ miles. One of the company’s principal roadways 
has been occupied by the tracks of the railroad, and a cut has been made across the 
main street of the village through a hill, which is now an embankment of sand 30 feet 
high, left unfinished and unbndged*. All work was progressing satisfactorily when, 
suddenly, on November 9, an order came to stop, and on Sunday, November 10, every¬ 
thing was abandoned. 

The beauty of our village has been greatly injured; tracts of land which were valu¬ 
able for building purposes have been cut so deeply that nothing but an expensive fill 
will restore them to their original condition; huge trees have been destroyed in all 
directions, and the property of the Lonsdale Co., stretching along the valley of the 
Blackstone River, looks as if an enormous steam shovel had dug its way through with 
no apparent object whatever. 

The Lonsdale Co. wishes it known that.it has paid exorbitant rates of freight to the 
New York, New Haven & Hartford Railroad Co. for many years, and that it has suf¬ 
fered many disadvantages from doing business upon its line. To illustrate: If the 
Lonsdale Co. were in a large city, it would deliver its merchandise to the New York, 
New Haven & Hartford Railroad freight house, where it could be loaded on cars by the 
employees of the railroad. At the Lonsdale Bleachery Station the New York, New 
Haven & Hartford Railroad Co. has persistently refused to furnish men to help load 
freight on their cars, and therefore the Lonsdale Co. is obliged to load all freight for the 
New York, New Haven & Hartford Railroad, making it necessary to keep several 
freight handlers in employ every day in the year. It is not an uncommon thing for 
some article of freight to be one week in coming from Boston to Lonsdale, being han¬ 
dled on the different branches of the New York, New Haven & Hartford Railroad. 
It frequently happens, though perhaps less so now than formerly, that the Lonsdale 
Co. is kept waiting for cars by which to make its shipments of freight to the far West. 

The Lonsdale Co.’s greatest grievance, however, is the rate charged by the New 
York, New Haven & Hartford Railroad for the local haul within the State of Rhode 
Island of coal from tide water, a distance of 6J miles. This rate, as before stated, is 
50 cents a ton. A few years ago, before the Rhode Island Co., which controls the 
street railways of the State, was absorbed by the New York, New Haven & Hartford 
Railroad Co., the shipper of coal with whom the Lonsdale Co. deals assured us that 
he could make an arrangement with the Rhode Island Co. to haul our coal from tide¬ 
water to Lonsdale for 30 cents a ton if we would build a small stretch of track (less 
than a quarter of a mile) in the village of Lonsdale. The Rhode Island Co. had the 
right under its charter to haul coal or other freight at night. We were about to carry 
out this suggested arrangement when the Rhode Island Co. was absorbed by the New 
York, New Haven & Hartford Railroad. It is thus obvious that we, together with all 
corporations hereabouts, are held absolutely in the grasp of the New York, New Haven 
& Hartford Railroad and subject to their demands for whatever freight rate they 
choose to ask. 

Lonsdale Co., 

By R. L. Gammell, Treasurer. 

State of Rhode Island, Providence , ss: 

Subscribed and sworn to before me this 7th day of December, A. D. 1912. 

[seal.] Charles S. Pettee, 

Notary Public. 

Mr. Pou. Mr. O’Shaunessy, are these rates complained of local 
or interstate rates ? 

Mr. OShaunessy. That I am not in a position to say. I pre¬ 
sume the president or the vice president of the New Haven Koad, 
who is here, will be able to enlighten us upon that. 

Mr. Pou. Has any appeal for relief been made to the Interstate 
Commerce Commission against these exorbitant rates of which you 
speak? 

Mr. O Shaunessy. That I do not know. 

Mr. Wilson. What business is the man you refer to engaged in? 
Mr. O’Siiaunessy. In the manufacture of cotton. 


8 N. Y., N. H. & J3ARTF0RD AND GRAND TRUNK R. R. AGREEMENT. 

/ 

Mr. Wilson. Then I presume their business is almost entirely 
interstate ? 

Mr. O’Shaunessy. Yes.. 

Mr. Wilson. And the rates are very likely interstate rates ? 

Mr. O’Shaunessy. I should think they were. 

Mr. Foster. I presume this coal is-shipped by water. 

Mr. O’Shaunessy. Partly by water and the rest by rail. 

Mr. Foster. Does this company own the ships which bring this 
coal there ? 

Mr. O’Shaunessy. I do not know whether they own the ships that 
bring the coal, but they own every method of transportation by rail 
and water between New York and Providence and between Boston 
and New York. 

Mr. Fosfer. Is there a shipping arrangement between the water 
transportation company who own the ships and the railroads with 
reference to those rates, or do you know? 

Mr. O’Shaunessy. That I do not know. Mr. Buckland can 
'enlighten us on that. 

With your permission I will read a few telegrams which I have 
received. 

Providence, R. I., December 9, 1912. 

'George F. O’Shaunessy, Esq., 

Congressman from Rhode Island , House of Representatives, Washington, D. C.: 

Regret absolute inability at this season to get away from business. Gov. Pothier 
and Mayor Fletcher, members of town criers, indorse unqualifiedly their and your 
stand on Grand Trunk matter. Wiring Committee on Rules to that effect and 
regarding investigation committee. 

Frederick W. Aldred, 

Chief Crier, Town Criers of Rhode Island. 


Bridgeport, Conn., December 9, 1912. 

Congressman F. O’Shaunessy, 

Washington, D. C. 

My Dear Sir: Your telegram received. I am interested in the work that you are 
doing, but I am unable to go to Washington Tuesday. 

Respectfully, Samuel E. Vincent. 


Pawtucket, R. I., December 9, 1912. 

Geo. F. O’Shaunessy, 

Member of Congress, Washington , D. C.: 

I regret sincerely my inability to go to Washington for public hearing. I am heart 
and soul in favor of your resolution, hoping that Congress will pass the same. 

F. X. L. Rattey, 

Mayor of Central Falls, R. I. 


Representative O’Shaunessy, 

Washington, D. C.: 


South Norwalk, Conn., December 9. 


Regret prior engagement prevents counsel of Connecticut Commuters’ League being 
heard before Rules Committee to-morrow. We will support any movement to check¬ 
mate Mellen’s inordinate ambitions. The New Haven’s huge overcapitalization 
must be disintegrated into original units and its tremenduous fixed charges reduced. 
In no other way can the road appropriate sufficient money for proper maintenance of 
way and operation items and thus save the lives of the public and give decent service. 

Charles Bates Bana, 
Counsel for Connecticut Commuters' League. 





N. Y. y 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 9 


Nashua, N. H., December 9, 1912. 

Geo. F. O’Shaunessy, 

Congressman, Washington, D. C.: 

Unable to attend hearing to-morrow. Citizens of Nashua and State generally de¬ 
mand relief from railroad monopoly. Trust your committee will sift whole situation 
thoroughly. 

W. H. Baker, Mayor. 


Providence, R. I., December 9, 1912. 

Hon. Geo. F. O’Shaunessy, 

House Office Building , Washington, D. C.: 

Regret inability to attend hearing on Grand Trunk matter Tuesday. Am wiring 
Mayor Fletcher to represent our exchange before committee. 

B. Thomas Potter, 

Chairman Special Committee on Grand Trunk of Providence Beal Estate Exchange. 


December 8, 1912. 

Hon. George F. O’Shaunessy, 

House of Representatives, Washington, D. C.: 

I greatly regret that illness in my family prevents my leaving here, else I would 
gladly appear in behalf of your resolution for an investigation of the New Haven road. 
The influence of the New Haven road has been so corrupting in Connecticut that I 
can think of nothing as harmful to the moral and commercial welfare of the New Eng¬ 
land States as a continuance of its practices and domination. Suggest if you have no 
one from Bridgeport, Conn., that Samuel E. Vincent, of that city, could help you. 

Frank S. Butterwortii. 


Boston, Mass., December 9, 1912. 

George F. O’Shaunessy, 

House of Representatives, Washington, D. C.: 

Message just received. Regret inability to be present. 

D. Ives. 


New Haven, Conn., December 8, 1912. 

Hon. George F. O’Shaunessy, 

Member of Congress, House of Representatives, Washington, D. C.: 

I greatly regret that illness in my family prevents my leaving here, else I would 
gladly appear in behalf of your resolution for an investigation of the New Haven road. 
The influence of the New Haven road has been so corrupting in Connecticut that I can 
think of nothing as harmful to the moral and commercial welfare of the New England 
States as continuance of its practices and domination. Suggest, if you have no one 
from Bridgeport, Conn., that Samuel E. Vincent, of that city, could help you. 

Frank S. Butterworth. 


Providence, R. I., December 8, 1912. 

Hon. George F. O’Shaunessy, 

House of Representatives, Washington, D. C.: 

Deeply regret can not accept Washington invitation. Would strongly emphasize 
local need greater than mere competition. Providence metropolitan district, 490,000 
people, has no possible express service north or west. No railroad whatever north¬ 
west. Needs hole broken through Chinese wall separating southern ocean gateway 
of New England from Connecticut Valley and beyond. Tired having to go to New 
York or Boston to change cars to get anywhere. Central New England, no less than 
Rhode Island, pays penalty. Absurd artificial conditions. Heartily approve your 
enterprise. 

Henry A. Barker. 


Boston, Mass., December 7, 1912. 

George F. O’Shaunessy, 

Member of Congress, Washington, D. C.: 

My engagements are such can not conveniently attend hearing next Tuesday. 
Chairman MacLeod is arranging to attend and will represent my views in the matter. 

George W. Bishop. 








10 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Boston, Mass., December 9, 1912. 

George F. O’Shaunessy, 

Member of Congress, Washington , D. C.: 

Fruit & Produce Exchange can not be present Tuesday. We favor every effort 
to clear the railroad situation and to aid New England. 

Alton E. Briggs. 


Peterboro, N. H., December 6, 1912. 

Hon. G. F. O’Shaunessy, 

House of Representatives , Washington, D. C.: 

Am in favor of a congressional investigation which will bring all the facts relative 
to the relations between Grand Trunk and New Haven Railroad. Sorry, but an 
engagement in Chicago will prevent my being in Washington Tuesday next. 

R. T. Bass. 


Providence, R. I., December 9, 1912. 


Hon. George F. O’Shaunessy, 

House Office Building, Washington, D. C.: 

Party leaves here 9.10 morning. Stop at New Willard. 

Henry Fletcher, Mayor. 


Providence, R. I., December 6, 1912. 


Hon. George O’Shaunessy, 

House of Representatives, Washington, D. C.: 

Referred your telegram to Harry Mays, president Jewelers Association. Good luck. 

Harry Cutler. 


This resolution also has^the hearty indorsement of Gov. Foss, of 
Massachusetts, and Gov. Pothier, of Rhode Island, whose representa¬ 
tives are here to-day to say something to us. 1 had a letter this 
morning which I think is well worth reading. Inasmuch as all of 
the letters are of the same tenor, condemnatory of the New Haven 
road and asking for the appointment of this committee, I shall leave 
them for your committee to go over at your further leisure; but this 
one which I got this morning with some photographs I think is well 
worth reading: 

195 Waterman Street, Providence, R. I. 

Representative O’Shaunessy. 

My Dear.Sir: Your activity in behalf of the citizens of our State on account of 
the suspension of the work of the Grand Trunk road here calls forth our highest appro¬ 
bation, and all hope the work may be resumed at a time not far distant. Many 
photographs have been taken, so you possibly have an idea of the chaotic condition 
of our streets and properties. But while the greater part of them can be restored in 
time to some sort of order, this place, of which I send rather poor picture, is ruined 
beyond any hope of restoration. 

It was my childhood home; my birthplace. An estate of about 20 acres, orna¬ 
mented by a fine grove of 72 chestnut trees, hedges, etc. The Grand Trunk entered 
without leave or license, removed a rentable house for site of abutment on Cranston 
Street, tore up walls, cut down and destroyed all trees, shrubs, etc., in the way of a 
diagonal cut across the place to Cranston Street. All the walls and about half the 
grand trees were used in the construction of an embankment about 30 feet high. 
This embankment runs close to the house, almost grazing it, ultimately planned to 
cut a part off, rendering it untenable. And it has cut off all access from the house to 
the street, so the only way to reach the house is a long roundabout detour from the 
rear across fields. 

We have not received one cent for all this devastation and had made up our minds 
to submit to the exigencies of progress and obtain what damages we could when the 
road was finished. But now that the work has been abandoned our grievance has 
become a very real one demanding redress, and one which we hope will be alleviated 
if your efforts meet with the success they merit. And if you can use these photo¬ 
graphs in any way to give stress or weight to your arguments please do so. 

May all success attend your good work. 

Very sincerely, yours, 


M. Helen Potter. 





N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 11 

That letter is merely illustrative of many others who are in the same 
condition. As I say, property has been destroyed and Rhode Island 
has been left in a most chaotic condition physically, and I think the 
situation is one which demands attention, and when my statement 
is supplemented by others whom I will call in support of the resolution, 
I hope your committee will take a favorable view of the matter. 

The Chairman. Are there any other investigations on foot either 
by the Federal Government or any of the State governments in regard 
to these matters ? 

Mr. O’Shaunessy. The Attorney General at present is presenting 
the facts in the case to the Federal grand jury at New York, perhaps 
with a view to indictment. Of course the presentation of. a case to a 
grand jury is secret and many facts otherwise obtainable can not be 
obtained before a grand jury. 

The Chairman. Why are the facts being presented in New York? 
How do they get jurisdiction there? 

Mr. O’Shaunessy. I think the agreement between Mr. Mellen and 
Mr. Chamberlin as to the abandonment of the work and a possible 
compensation to the road which had agreed to do the work was made 
there, so that would give them jurisdiction. I made a request yester¬ 
day of the Attorney General’s office over the phone, not to Mr. Wicker- 
sham but to one of his assistants, for a copy of the traffic agreement 
which I understood had been entered into between the New York & 
New Haven Railroad and the Grand Trunk Railway, and I was 
informed I could not have a copy of it inasmuch as the circumstances 
under which it was obtained did not warrant showing it at this time. 

Mr. Pou. As I understand it, Mr. O’Shaunessy, the overt acts 
which you think indicate a violation of the Sherman antitrust law 
occurred on and since November 9 th? 

Mr. O’Shaunessy. Yes, sir. 

Mr. Lindbergh. In this particular matter ? 

Mr. O’Shaunessy. Yes, in this particular matter. Of course, I 
believe, as do all the people of New England, that the whole story of 
the New Haven road is a violation of the State and Federals laws in 
the sense it has gone about to check and throttle competition where- 
ever competition has shown its head, so to-day we are absolutely 
within the grasp of the New Haven road. 

Mr. Foster. You do not mean to say that all these overt acts have 
occurred since the 9th of November? 

Mr. O’Shaunessy. Oh, no; this particular one of tearing up our 
State and getting the Grand Trunk Railroad to abandon this work 
for presumably a favorable consideration. 

The Chairman. When was this alleged throttling of competition 
first presented to the Attorney General by the citizens of your section 
of the country ? 

Mr. O’Shaunessy. I think Mr. Bliss, who will follow me, will be 
able to enlighten us upon that subject, because he has appeared before 
the Federal grand jury. 

Mr. Lindbergh. Are you familiar with the litigation once begun 
by the Federal Government against the New York & New Haven 
Railroad and afterwards dismissed, three or four years ago? 

Mr. O’Shaunessy. I am not. Mr. Norman H. White will en¬ 
lighten us, perhaps, upon that feature of the matter. 


12 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Mr. Hardwick. Mr. O’Shaunessy, do we need any change in exist¬ 
ing law to meet any of the conditions you allege here; in other words, 
is the existing Federal law complete and ample to meet the conditions, 
if it is fairly enforced ? 

Mr. O’Shaunessy. That I can not say. 

Mr. Hardwick. Is it the object of the investigation to point out 
what changes we need in existing law ? 

Mr. O’Shaunessy. I presume so. I surely think so. 

Mr. Hardwick. It seems to me you are the man who ought to 
know, because you offer the resolution. In other words, is it your 
idea simply to have an investigation of the facts or do you think the 
existing law is incomplete and inadequate and that an investigation 
of the facts will disclose some duty of Congress in the premises ? 

Mr. O’Shaunessy. The way I look upon the investigation is this: 
Of course, there is always the hope that there will be a revelation of 
such facts as will suggest remedial legislation. I think every investi¬ 
gating committee has determined that question in that way. The 
temper, however, of the people of New England is to have a thorough 
exposition of this deal in particular and of everything back of it. 

Mr. Hardwick. I presume that you yourself as a Member of Con¬ 
gress would be inclined to the view that unless there is something 
that Congress should do in the premises, we could not simply adver¬ 
tise the situation by the establishment of a committee. 

Mr. O’Shaunessy. Surely not; unless there were supplementary 
facts to present it would be unavailing. 

House of Representatives, United States, 

Committee on Patents, 
Washington, D. C., December 7, 1912. 

Hon. George F. O’Shaunessy, 

House of Representatives, Washington, D. C. 

Dear Mr. O’Shaunessy: In reference to the New Haven-Grand Trunk fiasco, in 
which you have interested yourself, don’t overlook the fact that this matter is of much 
importance to the third Massachusetts district. The Southbridge people in said 
district are much disturbed about it. Call on me if I can be of any assistance in your 
plans, although I understand for the moment that the activities of the Attorney Gen¬ 
eral’s Department make unnecessary activity at the moment. 

Very truly, yours, 

William II. Wilder. 


50 South Main Street, 
Providence, R. /., December 7, 1912. 

Hon. George F. O’Shaunessy, 

House of Representatives, Washington , D. C. 

Dear Sir: We see in the newspapers that there is to be a hearing before the Rules 
Committee of the House on Tuesday on the matter of the relations between the Grand 
Trunk and the New Haven in New England. This firm, operating many mills in 
different parts of the State, has for a long time felt that we were subject 
to unjust rates and none too good service from the New Haven road. When the 
Grand Trunk, or Southern New England, line was projected, we welcomed the com¬ 
petition with great satisfaction. We agreed to sell 1,300,000 square feet of land to 
the Southern New England at a very low price and we arranged with them to give 
us a spur track at the Lonsdale Bleachery Station, where a large amount of freight is 
handled each week. This spur track, if the Southern New England Railway is ever 
completed, will carry our products to the West over the Grand Trunk connections 
and to tidewater at the new docks in Providence. Incoming freight, like coal and 
cotton, would also be delivered to us at rates which we think 'would be materially 
less than that charged by the New Haven, especially on local hauls where the New 
Haven is not restrained by the Interstate Commerce Commission. 



N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 13 


It is impossible for the writer, who is the treasurer of the Lonsdale Co., to attend 
the meeting on Tuesday, but he has thought it best to prepare the inclosed affidavit, 
which can be read before the committee and which in simple language tells the story 
of how our interests as large shippers of freight are affected by the New Haven-Grand 
Trunk deal. 

Your kind attention in this matter is solicited. 

Very truly, yours, Goddard Bros., 

Agents. 


Metropolitan Park Commission, 

Providence, December 8, 1912. 

My Dear Mr. O’Shaunessy: I have already sent you a telegram stating my 
regret at being unable to go to Washington for Tuesday’s hearing. Success attend 
your enterprising efforts. I have hurriedly prepared several exhibits that I believe 
have a significant bearing upon the logical need for railroad connections, as well as for 
harbor developments. The harbor is better provided for to-day than the railroads are. 
but nature did most of that—more in fact than she did.in most of the present world 
famous harbors. My figures about distances to South America, etc., are taken from 
Boston Chamber of Commerce, with alteration for Providence as against Boston. I 
did not believe them at first until'I studied a big globe and measured them for myself. 

Of course we need competition by water to New York and by rail to other places, 
but especially we need some rail connection in that direction where we now have 
absolutely none, i. e., toward Springfield, where connections could be made with 
Canadian and western points. I suppose if there was a modern railroad with proper 
grades, curves, etc., like the splendidly designed one of the Southern New England 
Co., the Interstate Commerce Commission or other Government agency would compel 
the connecting railroads to handle “through” traffic. This projected but now inter¬ 
rupted enterprise meant more than merely a competing line, because you can’t have 
competition with something that doesn’t exist. I believe that this is fully as important 
to the Palmer-Springfield neighborhood and all beyond, as it is to Rhode Island, 
because it would give them outlet and inlet at their natural water gateway on the 
ocean. In a straight line Palmer is 55 and Springfield 66 miles from the Providence 
city hall. The quickest way to get to them is in an automobile. 

1 suppose the railroads figure that a certain quantity of business will be handled, 
anyway, and they have no especial object in shortening the distance around Robin 
Hood’s barn. Perhaps, also, some of the New York and Pennsylvania stockholders 
of the New Haven road would be as well pleased to have, the foreign freight routed 
from New York by certain western rods as from any new foreign steamship lines 
landing at Providence and connecting with the Boston & Albany or, horrible to 
think of, a Canadian railroad. Without railroad connections north and northwest, 
there will not be so much profit to induce steamships from foreign places to come to 
Providence; and if they fail to do so the freight bound from this city to the Mediter¬ 
ranean, for example, will continue to pay tribute to the Providence line to take it to 
South Brooklyn via New York and start it out from there. I have been told that 
there is one single concern in Providence to whom this freight to South Brooklyn 
means an item of $22,000 a year, or enough to pay interest at 5 per cent on the con¬ 
struction cost of one of our new State docks. The railroad to Palmer being such a logical 
one and so evidently called for for local traffic through a populous neighborhood 
and to meet New Englands needs, it is evident that only artificial restriction to 
sidetrack natural laws of trade and commerce can have prevented its building long 
ago. The city of Providence started to finance such an enterprise long ago, but 
history shows how the proposition was sidetracked, and the “Springfield Railroad,” 
instead of reaching connections for somewhere in the Massachusetts city, found its 
terminus at Southbridge, Mass. But now, I fancy, if the Southern New England- 
Grand Trunk is to be bought off from utilizing the very overgenerous privileges 
that it has secured, somebody else will be glad to take up the job. The city of Prov¬ 
idence could finance it without causing any flutter in its tax rate. 

Yours, very truly, 


Henry A. Barker. 



14 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Why Providence Should be a Center of Distribution and a Great Railroad 
and Steamship Terminus, New England’s “Southern Gateway.” 

[From Providence Board of Trade book, 1910.] 

SOUTHERN GATEWAY OF NEW ENGLAND. 

Few people realize that there are within a day’s excursion distance of Providence 
more people than can be found within an equal radius of any other harbor in the 
Western Hemisphere, salt or fresh, except those of New York and Philadelphia. 
Taking a radius of 80 miles as marking a reasonable limit of a single day’s round trip, 

WITHIN A SINGLE DAY’S EXCURSION. 


po*n.««o?fc, 
" $ 



The population circles of 80 miles radius drawn around Providence and Boston. 

Thh head of Narragausett Bay has more dwellers within 80 miles than any other Harbor 
in the Western Hemisphere, save those of New York and Philadelphia. 


we find, by counting up the population of the various towns included in the circle, 
that there are nearly four and a quarter million people who could come to Providence 
and get home the same day. We shall also find, probably, that there are more great 
industries within this circle, needing raw materials to work with and coal to operate 
them, than can be found in any similar circle on this side of the world, unless it should 
be one drawn somewhere in New Jersey, with the ports of New York and Philadelphia 
as their feeders. This, of course, means a great commercial opportunity. The 
Providence Board of Trade has christened Naragansett Bay “The Southern Gateway 
of New England,” but it didn’t make it so. The good Lord attended to that a few 
million years ago. 






N. Y v 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 15 


THE POPULOUS DISTRICTS OP AMERICA. 


Eighty-mile circles drawn around various harbors of America show this result as to 
population: 


Population, 1900. 


New York. . 
Philadelphia 
Providence. 

Boston. 

Chicago. 

Baltimore. .. 
Washington. 


6, 500, 829 
4, 252, 534 
3, 572, 494 
3, 235, 923 
2, 723, 548 
2. 347, 867 
1, 760, 866 



THE NEW YORK CIRCLE 
OF 80 MILES RADIUS 

the MOST POPULOUS in THE 
WESTERN hemisphere. 



THE PHILADELPHIA CIRCLE 
OP 80 MILES RADIUS 

SECOND IN POPULATION IN THE 
WESTERN HEMISPHERE 




THE BALTIMORE AND 
WASHINGTON CIRCLES. 

For populations of these circles, see next page. 

Figures for 1900 carefully added by counties and towns. 

Estimates for 1910 based on completed census returns from Rhode Island and govern¬ 
ment estimates for 1910 of territory in the other states. 

No circle of similar radius .that can be drawn in any other portion of the Western Hemi¬ 
sphere contains as much as 2,000,000 people. 


Estimated population , 1910. 


New York. . 
Philadelphia 
Providence. . 

Boston. 

Chicago. 

Baltimore. .. 
Wash ington. 


. 7,983,636 
. 5,108,858 
. 4,188,651 
. 3,729,507 
. 3,256,950 
. 2,679,209 
. 1,991,969 



























16 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


No other circle of similar radius can be drawn in any other portion of the AVestern 
Hemisphere that contains 2,000,000 people. The New York and Philadelphia circles 
overlap, as do those of Baltimore and Washington and Providence and Boston. In 
the case of the latter, however, it is to be observed that the country to the northeast, 
which is in the Boston circle but not in that of Providence, is much less populous and 
fast growing than the part of Providence circle that is outside of the Boston one. Even 
in the State of Massachusetts a considerably larger number of the people are within 
the Providence circle than are within that of Boston. It was inevitable that sooner 
or later the laws of trade and distribution would appreciate this fact as well as the 
relative position of the two cities and that Providence should become recognized as 
the southern gateway, while Boston will remain the principal eastern gateway of 
New England. 

The 1910 census, taken since I prepared these tables, shows that the estimate of 
population for the Providence circle was bqlow the actual fact. Except New Jersey, 
this district shows more rapid growth than any other in the East. 

II. A. B. 


The “Southern Gateway of New England.” 

SITUATION AT PROVIDENCE DEMANDS ADEQUATE RAILROAD CONNECTIONS AND JUS¬ 
TIFIES HARBOR DEVELOPMENT, NOT ONLY ON ACCOUNT OF LOCAL BENEFITS, BUT 

FOR THE CONVENIENCE OF ALL NEW ENGLAND. 

Providence is the nearest seaport to a majority of New England’s industries and 
population. 

Providence is the most convenient and only logical southern gateway to nearly 
all New England, including the Boston district. 

Narragansett Bay is one of the greatest natural harbors in the world. Ships of 
11,000 tons now come to Providence wharves, and the biggest ships afloat could 
come under .their own power to a point only 7 miles below the center of the city 
and to the inner harbor by a comparatively small public expenditure. 

Rhode Island is the most densely populated State in the Union. Near-by Mas¬ 
sachusetts ranks next. Four hundred and eighty-nine thousand people live in the 
Providence “metropolitan district’’ (U. S. Census, 1910). About 1,500,000 in 30- 
mile circle. About 4,330,000 within 80 miles. 

Providence should be the distributing point for all goods coming by water from 
all southern points—from Panama Canal and from South America to all New Eng¬ 
land. From here the manufactured products of all New England should sail to 
exchange for the raw materials of South America, Southern States, and West Indies. 
Except New Bedford and Newport, it is the nearest of all United States seaports 
to all the great cities on the east coast of South America. It is 125 miles nearer 
Panama than Boston is, and a shorter land journey to more people. The marine 
insurance rate is considerably less. 

It should therefore be a great railroad and steamship center; but— 

It has no modern railroads except to New York and to Boston. It has no direct 
connections west or north beyond Willimantic and Worcester; it has no railroad at 
all toward the northwest, except a little wiggly branch line to Southbridge, Mass. 
It therefore needs rebuilt lines suitable for modern traffic to Hartford and to Worces¬ 
ter; and, especially, 

It needs a real railroad to Palmer and to Springfield, Mass., in order that it may 
have' local traffic and through connections without breaking freight or changing 
cars for northern New England, Canadian, and Western points. 

Obviously, the interior districts of New England need this quite as much as Provi¬ 
dence does. A “Chinese wall” separates them now. 

And yet the harbor activity grows enormously in spite of the absurd restriction 
that monopoly has provided. Providence commerce is more than $100,000,000 a 
year and tonnage more than the whole Mississippi River south of Cairo. 

To Panama, Providence is nearer than San Francisco by over 1,330 miles. 

To Rio Janeiro, Buenos Aires, etc., Providence is nearer than New York by 81 
miles; than Philadelphia by 134; Baltimore by 150; than New Orleans by 560; and 
Galveston by 800. 



N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 17 


[Copy of resolution adoptad by the Olneyville Business Men’s Association.] 

Whereas it is currently reported that an agreement has been entered into between 
the New York, New Haven & Hartford Railroad Co. and the Southern New Eng¬ 
land Railway Co., whereby the construction of said Southern New England Co.’s 
line between Palmer, Mass., and Providence, R. I., has been suspended, and where, 
by the terms of said alleged agreement, it is understood that the said New York, 
New Haven & Hartford Railroad Co. will continue to monopolize the transporta¬ 
tion business of the State of Rhode Island, to the great detriment of the business 
interests and of the people of the State: Therefore be it 

Resolved , That we, the Olneyville Business Men’s Association, hereby express our 
hearty disapproval and condemnation of said alleged agreement, entered into by 
said railroad companies as aforesaid, and of the suspension of construction by said 
New England Railway Co., in violation of its solemn pledge given to the people of 
Rhode Island, and especially to the Olneyville Business Men’s Association by its vice 
president; and be it further 

Resolved , That we heartily commend the action of the governor of the State, the 
mayor of the city of Providence and the common council' thereof, the various civic 
and business organizations, and the public press throughout the State, to obtain from 
said Southern New England Railway Co. a satisfactory explanation of its intention 
regarding the final completion of its right of way into Rhode Island. We further 
commend the vigorous and timely action by Congressman George F. O’Shaunessy 
in bringing the matter to the attention of the Federal Government, and we request 
that such further action, civil or criminal, be taken by the State and Federal author¬ 
ities as will compel the carrying out of the solemn pact entered into by said Southern 
New England Railway Co. with the people of Rhode Island. 

Frank L. Hanley, 

C. T. Briggs, 

Bernard M. Truman, 
Committee on Resolutions. 

Mr. O’Shaunessy. Mr. Chairman, I am going to present at this 
time Mr. William C. Bliss, chairman of our public utilities com¬ 
mission, who will enlighten us upon the physical condition of the 
railroad. 

STATEMENT OF MR. WILLIAM C. BLISS, CHAIRMAN PUBLIC 
UTILITIES COMMISSION OF RHODE ISLAND. 

Mr. Bliss. Mr. Chairman and gentlemen of the committee, I do 
not propose to take up much of your time, because there are so many 
other gentlemen from Massachusetts and Rhode Island who desire 
to be heard upon this matter. 

Mr. Pou. Are you the chairman of the public utilities commission ? 
Mr. Bliss. I am chairman of the public utilities commission of the 
State of Rhode Island. I can best illustrate to you the proposed ex¬ 
tension of the Central Vermont into Boston and Providence by the 
folder of the Central Vermont system, and the committee will there 
see, as the proposed line under construction, the line from Palmer upon 
the Central Vermont Railroad to Providence, R. I. There is also 
shown upon this folder the proposed extension from Blackstone upon 
this line into Boston, and also to Worcester, and then the proposed 
line from White River Junction upon the Central Vermont down into 
Boston. 

The Chairman. How many miles would that be in all ? 

Mr Bliss. The line from Providence to Palmer is approximately 
61 miles in length. I think the chairman of the Massachusetts com¬ 
mission can give you the information with reference to the other line. 
We are interested in the extension from Palmer to Providence, about 
61 miles in length. The Central Vermont Railway, with its controlled 

72177—13-2 


18 N. Y.y N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

lines, extends from Montreal south through the States of Vermont, 
New Hampshire, Massachusetts, and Connecticut to tidewater a,t 
New London, Conn. The proposed extension from Palmer to Provi¬ 
dence is from the town of Palmer upon the Central Vermont line down 
to the Rhode Island line at a point near Woonsocket and then extend¬ 
ing from there to tidewater in the city of Providence. The first 
application on the part of the Central Vermont or the Grand Trunk, 
controlling the Central Vermont, for a charter in Rhode Island was 
made irr February of 1910 to the General Assembfy of the State of 
Rhode Island, requesting the incorporation of a railroad known as the 
Southern New England Railway Co., to build from the State line at 
a point near Woonsocket to tidewater at Providence, with the right 
to make connections with the New York, New Haven & Hartford 
Railroad and to use the Union Depot in Providence. That applica¬ 
tion presented to the people of the State of Rhode Island an oppor¬ 
tunity for a competing line, because the Grand Trunk maintained 
western connections, and it seemed to offer some relief from a system 
of monopoly under which we were then living, and the application 
met with the hearty approbation of all of the municipalities of Rhode 
Island, all of the business associations, and I venture to say without 
fear of contradiction that the sentiment of the State of Rhode Island 
was unanimously in favor of the construction of this road, and it so 
proved at the hearings that were held before the general assembly, the 
first hearing being held before the committee on corporations of the 
house of representatives and being the largest hearing that was ever 
held before a legislative committee of the State of Rhode Island. 

It was held in the house of representatives chamber and there the 
sentiment seemed to be almost unanimously in favor of the charter, 
the only objections offered being those on behalf of the New York, 
New Haven & Hartford Railroad. Many of those objections were 
proper ones, as to the form of the charter, that it granted greater 
rights than should be granted to a railroad, and that it did an injus¬ 
tice to existing railroads; but the principal objection that arose was 
that there was nothing to show this was a real railroad; that there 
was nothing to show it had the support of the Grand Trunk Railway 
system; that it was merely an application of so many gentlemen 
foT a charter as a railroad, and there was nothing to show that the 
Grand Trunk Railway was behind the proposition or would construct 
the road. The people of Rhode Island and the general assembly 
received the most positive assurances that it was possible to receive 
from the gentlemen connected with the Grand Trunk Railway system. 
Mr. Hays himself, then the president of the Grand Trunk Railway, 
signed the petition for the charter and was one of those who were 
named as the original incorporators. At the hearing which was held 
a cablegram was read from the London board of directors of the 
Grand Trunk Railway system, in which they had passed a vote upon 
the very day that the meeting was held; they approved the plan of 
construction of the Palmer extension. 

Proceeding upon these assurances, which were the best assurances 
that the people of Rhode Island could receive, the charter was granted 
by the general assembly by a unanimous vote of both branches. 
The next stage in the proceeding was the application in the State of 
Massachusetts for a connection from the Rhode Island line to Palmer, 
and there again opposition presented itself in the form of an applica- 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 19 

tion on the part of the New York, New Haven & Hartford Railroad 
for permission to build a line from Palmer to South Bridge, making a 
complete connection to Providence, and permission was finally 
granted to the Southern New England Railway, the corporation in 
Massachusetts, to build from Palmer to the Woonsocket line, thus 
giving them legislative authority to lay out their whole line from 
Palmer to Providence. In the general assembly of 1911, the follow¬ 
ing year, certain amendments were asked to the charter, giving 
additional rights to make connection at tidewater, over certain streets 
in the city of Providence, and those again were granted by unanimous 
vote of the general assembly; and in 1912, the present year, again 
amendments were sought giving them the right to close certain 
streets, thus saving considerable expense in the elimination of grade 
crossings, and again the general assembly unanimously granted these 
additional rights to the Southern New England Railroad Co. 

The construction was commenced, I think, about in May of the 
present year, and was pushed with the utmost speed. Starts were 
made at various points over the entire line and the construction was 
proceeding with the greatest rapidity up to the 8th day of November, 
when, like a bolt out of a clear sky, the people of the State of Rhode 
Island were informed that construction work would be abandoned 
iemporarily, a$d immediately the people sought the reason. The 
governor of the State communicated with Mr. Chamberlin, the presi¬ 
dent of the Grand Trunk Railway, at Montreal, inquiring the reason 
for the abandonment, and asking that he give some assurances to the 
people of the State of Rhode Island when the work would be con¬ 
tinued. The governor alsp cabled to Mr. Smithers, the chairman of 
the Grand Trunk board of directors, at London, requesting like infor¬ 
mation from him. The governor received a reply from Mr. Smithers 
that he must refer him to Mr. Chamberlin for his information, and Mr. 
Chamberlin replied to his telegram saying that he would be unable 
to meet the governor in Providence, as the governor had requested, 
but that he would be in New York on Thursday and Friday of 
that week, the 14th and 15th of November, and he would bo pleased 
to meet the governor and to explain to him in detail the conditions. 
The governor, being unable to see Mr. Chamberlin in New York, 
commissioned the attorney general of the State of Rhode Island and 
myself to act as his representatives at this interview. 

We met Mr. Chamberlin by appointment upon the 15th of Novem¬ 
ber at his room in the Waldorf-Astoria, and we requested from him 
the reason for the abandonment or the temporary abandonment of this 
work; and he told us that the abandonment of the work was due to 
an order which he had received or a cable which he had received 
from his board of directors, telling him to check all new construction 
work as far as possible on account of the financial condition then ex¬ 
isting in Europe, due to the Balkan war. We then inquired of him 
if he could give us any assurance as to when this work would be con¬ 
tinued, and he said that he could not. We asked him if, when the 
financial stringency was relieved, the work upon the Palmer extension 
would be resumed, and he said that he could not tell about that; it 
would depend upon his board of directors. W T e then asked him if, 
so far as his own knowledge went and so far as he was personally 
concerned, when this financial stringency was relieved, there would 
be any discrimination against further construction work upon the 


20 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Palmer extension, and he said that as far as his own knowledge went 
there would not be any discrimination, but it would depend upon his 
board of directors. His attitude throughout the entire interview 
was one of evasiveness, and we left without any assurance whatever 
that the construction work would "be continued; and since that time, 
although every effort has been made by the mayors of the various 
municipalities and by the governor of the State, we have been unable 
to secure any positive assurance whatever, either from the board of 
directors of the Grand Trunk Railway or from the president of the 
system, as to when construction work will be continued. 

Coincident with the notice of abandonment, rumors appeared in 
the public press that a traffic and trackage agreement had been under 
consideration between the heads of the Grand Trunk system and the 
New York & New Haven Railroad, pointing to a traffic and trackage 
agreement covering practically the entire New England territory, 
which was at first denied. Of course, the only authority we had 
were the statements in the press, but finally first one system gave out 
the information that such an agreement had been under consideration 
and that conferences had been held which appeared almost in the 
same newspaper with a positive denial on the part of the other system. 
Then, finally, both systems admitted they had had a traffic and 
trackage agreement under consideration, and that they had arrived 
almost at a point of agreement. Now, that traffic and trackage 
agreement, while it may be known to the Attorney General’s Depart¬ 
ment, the Department of Justice at Washington, has not been made 
public, and has not been made known to the people of New England, 
who are vitally interested in it; and so far we are absolutely without 
information as to the details of this arrangement. The very fact that 
the information that such an agreement was under consideration was 
practically wrung from these two railroads at the very moment that 
the order of abandonment of work came would seem to indicate that 
there should be the fullest investigation on account of the interest of 
the people of New England, who are vitally interested in the propo¬ 
sition. If the abandonment of this road is a secret consideration for 
a traffic and trackage agreement between these two roads, there has 
been a violation of the Sherman law, and the parties who are guilty 
should be punished. 

We believe that the public are entitled to the facts upon this 
matter. We believe that while a Federal grand jury may conduct 
secret investigations and see to it that crimes are punished, we 
believe that the public are entitled to the facts in this matter, and 
we are utterly unable to secure them so far as our State and local 
governments are concerned, and only the power of the Federal 
Government or an investigation by a congressional committee can 
provide the people with these facts so they can act intelligently, 
and can provide Congress with the facts so that they may legislate 
wisely if additional legislation is necessary. 

In order to show the substantial character of the construction 
work upon this road I have here photographs showing the entire 
work from the water front in Providence and extending all the way 
to the State line at Woonsocket, and by looking over these pho¬ 
tographs you will see that the character of the work is substantial; 
that it was progressing with the utmost activity, and that it was 
stopped almost in an instant, and, as all of you gentlemen must 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 21 

know from the character of the construction work you will see 
being carried on there, the approach of winter is a very small obstacle 
to the blasting out of rock cuts or the making of fills and the rough 
construction work of a railroad. 

We believe that an investigation of this question will disclose the 
fact that this is the only portion of construction work upon the 
Grand Trunk system which was stopped at this time, and that the 
excuse given was not an honest excuse. 

In connection with the construction of this road I wish to bring 
out just one other matter, and then I will close. In the city of Provi¬ 
dence practically all of the water front available for transportation 
purposes, where railroad facilities are provided, is in the ownership 
of the New York, New Haven & Hartford Railroad, or its allied com¬ 
panies. When the Southern New England Railway came and pro¬ 
posed this line, the only opportunity that they had to secure a proper 
tidewater connection and a proper frontage was through the assistance 
of the State of Rhode Island and the city of Providence. The State 
of Rhode Island appropriated one-half million dollars for the purpose 
of purchasing water-front property, to make it possible for competing 
lines of steamers t-o come in there and make connections, and to do 
away with the Chinese wall that existed around our water front. Of 
what use was it for the Federal Government to expend millions of 
dollars in improving the channel and aids of navigation to Narragan- 
set Bay and Providence, if only one company had the right to use 
th^se avenues of approach? The State of Rhode Island, realizing 
that, appropriated one-half million dollars for the purchase of shore 
front property and the construction of a State dock. This dock will 
be completed in April of the coming year, and the Southern New 
England Railway had under negotiation and practically at the point 
of execution a lease of one-half of this State dock. They have under 
construction two passenger and freight steamers to make the con¬ 
nection with New York, and they were to use this dock. 

The city of Providence, with a large portion of city property, 
appropriated the sum of $400,000 for the building of a wharf front, 
a retaining wall, and a lease of half of that property, with an option 
upon the rest, was at the point of execution by the Southern New 
England Railway people with the city of Providence enabling them 
to secure an access to a water front that was equal if not superior to 
any that then existed in the city of Providence. We have made all 
these efforts to welcome a real competition into Rhode Island, and we 
believe that the reason for the sudden stoppage of the work should 
be gone into and discovered. If no offense has been committed, 
well and good, but we believe- 

Mr. Wilson (interposing). Right at that point, do you think 
Congress ought to go into that question? 

Mr. Bliss. We believe that only through the medium of an investi¬ 
gation of this kind can the facts be presented to the public. If no 
offense has been committed, well and good. 

The Chairman. But if an offense has been committed, Mr. Bliss, 
is not the Sherman antitrust law efficient to punish the offense and 
to remedy the conditions which you gentlemen are complaining 
against ? 

Mr. Bliss. As I read the last report of the Attorney General, he 
seems to doubt the adequacy of the criminal phase of the Sherman 
antitrust law. 



22 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT- 

Mr. Wilson. Have you had the case before the Attorney General? 

Mr. Bliss. The matter is now under investigation by the Attorney 
General, and a Federal grand jury is now holding its sessions in New 
York City. 

Mr. Lindbergh. Is that the extent and the scope of the investiga¬ 
tion by the Federal Government ? 

Mr. Bliss. The Interstate Commerce Commission, as I understand 
it, is conducting a broad investigation into the service, practices, and 
rates of the New York, New Haven & Hartford Railroad and the 
Boston & Maine Railroad. Those hearings have been carried on for 
some months, mostly in Boston. 

Mr. Lindbergh. Does that investigation involve questions of 
monopoly as well of rates? 

Mr. Bliss. I understand, and of course I can merely understand 
by information obtained by hearsay and from the press, that inves¬ 
tigators and experts of the Interstate Commerce Commission are en¬ 
gaged in going over the books of the New York, New Haven & Hart¬ 
ford Railroad Co. and its allied companies, for the purpose of making 
a report. 

Mr. Stanley. Is this contention you make here as to the abandon¬ 
ment of this road one of the results of the amendment to the statutes 
of Massachusetts permitting this consolidation ? 

Mr. Bliss. I am not familiar with the Massachusetts legislation of 
recent years with reference to consolidation. 

Mr. Stanley. You remember that the New York, New Haven & 
Hartford road and the Boston & Maine road went before the Massa¬ 
chusetts Legislature and secured the repeal of certain acts with ref¬ 
erence to that consolidation? 

Mr. Bliss. I have understood that the New York, New Haven & 
Hartford Railroad secured the ownership of a controlling interest in 
the stock of the Boston & Maine Railroad, that being at the time in 
violation of the laws of the State of Massachusetts; that later, a 
validation of their action was, secured from the General Assembly or 
the Legislature of Massachusetts, and providing for the Boston Hold¬ 
ing Co., so called, and giving them certain rights as to the purchase of 
this stock. 

Mr. Stanley. Do you trace this trouble to the validation of that 
act and the establishment of this holding company ? 

Mr. Bliss. I am not prepared to say as to that. 

Mr. Lindbergh. Are you familiar with the litigation begun by the 
Government against the New York, New Haven & Hartford road 
some years ago and afterwards dismissed? 

Mr. Bliss. In a general way ; yes. I think Mr. White can explain 
that perhaps more in detail than myself. As I understand it, the 
litigation was commenced in connection with the absorption of the 
trolley and steamboat systems, and the principle involved was prac¬ 
tically the same as is involved in the case recently decided by the 
United States Supreme Court. 

Mr. Garrett. Do you know why that' case was dismissed, Mr. 
Bliss ? 

Mr. Bliss. Simply by hearsay, again, I understand that it was 
discontinued by direction of the Department of Justice after the 
finding of the circuit court of appeals in the Southern Pacific case, 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 23 

which did not sustain the contentions of the Government. That 
case was reversed by the United States Supreme Court. 

Mr. Garrett. What provision is there in the charter relative to 
the matter of construction ? Does it fix any time in which the road 
shall be constructed ? 

Mr. Bliss. The charter provides that the work must be completed 
by 1915. 

Mr. Garrett. If not, the charter will be forfeited ? 

Mr. Bliss. If not, the charter will be forfeited. The Southern New 
England has already paid in land damages for the property taken by 
it under condemnation approximately $750,000, leaving a balance of 
about $500,000 to pay the rest of their land damages. The only 
security that the people of the State of Rhode Island have is a bond 
of $1,000,000 which was filed in the condemnation proceedings to 
provide for reimbursement to those whose property was taken by 
condemnation. 

Mr. Garrett. Is it only in the State of Rhode Island that work 
has ceased ? 

Mr. Bliss. Work has ceased over the entire construction from 
Palmer to Providence. The pictures I have are simply those taken 
in Providence. In the State of Massachusetts the construction work 
is just as substantial as it is in Rhode Island. 

Mr. Wilson. Work has ceased there also, has it? 

Mr. Bliss. It has ceased there also. At Palmer, Mass., the rails 
which had been brought there and left loaded upon the cars, appar¬ 
ently with the idea of taking them out and unloading them along 
the right of way, upon the order of abandonment were unloaded in 
Palmer and piled up there, and steel rails sufficient to build the 
entire extension are all piled up at Palmer, Mass., together with a 
large quantity of bridge girders and other bridge material. 

Mr. Lindbergh. Was this work being done under one general 
contract ? 

Mr. Bliss. There were two contractors. The portion in Rhode 
Island was being constructed by the O’Brien Construction Co., of 
New York, and John Marsh & Co., of Chicago, had the construction 
work in the State of Massachusetts. There were various subcon¬ 
tractors in connection with the abutment and bridge work. 

Mr. Lindbergh. Have you any information from the contractors 
as to any arrangement made with them for cessation of work ? 

Mr. Bliss. So far as our investigation went, they received this 
summary order to stop the work and they stopped immediately. 
Four hundred negro laborers were brought from New York to the 
contractor who was engaged in this work outside of Woonsocket 
upon Saturday, and he shipped them back upon the following Mon¬ 
day morning, so the order was summary and without any previous 
notice to the contractors. 

Mr. Garrett. How much power does the public utilities commis¬ 
sion, of which you are chairman, have in matters of investigation of 
this sort, under your State laws ? 

Mr. Bliss. The question arises as to whether this Southern New 
England Railroad is a railroad. It is not yet completed, and, what¬ 
ever our powers might be, the power to investigate outside of the 
State of Rhode Island is absolutely cut off from us. We can only 


24 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


secure information from those who come within our jurisdiction, 
while the Federal Government can reach out anywhere. 

Thereupon, at 12 o’clock noon, the committee took a recess until 
2 o’clock p. m. 

AFTER RECESS. 

The committee met, pursuant to the taking of recess, at 2 o’clock 
p. m., Hon. Kobert L. Henry (chairman) presiding. 

The Chairman. The committee will be in order. Mr. O’Shaunessy, 
who desires to address the committee at this time. 

Mr. O’Shaunessy. Before proceeding I want to have inserted in 
the record a letter from Congressman-elect Gerry, dated December 
9, 1912, addressed to the chairman of this committee. 

The letter offered by Mr. O’Shaunessy is as follows: 

December 9, 1912. 

Hon. Robert L. Henry, M. C., 

Chairman House Committee on Rules, House of Representatives, Washington, D. C. 

Dear Sir: As the Representative-elect of the second congressional district of 
Rhode Island, I am writing to urge the appointment of a committee to investigate 
the rumored arrangement said to exist between the New York, New Haven & Hart¬ 
ford Railroad Co. and the Grand Trunk. This is a matter of vital importance to my 
State. 

Very respectfully, yours, Peter G. Gerry. 

Mr. O’Shaunessy. I want to present to the committee Mayor 
Henry W. Fletcher, of Providence. 

STATEMENT OF HON. HENRY W. FLETCHER, MAYOR OF 
PROVIDENCE, R. I. 

Mr. Fletcher. Mr. Chairman and gentlemen of the committee, as 
the representative of the city of Providence on this occasion, I have 
prepared a statement which covers the situation so far as the city 
of Providence is concerned. I am anxious that the committee should 
know exactly the situation as it exists. I have therefore prepared 
this statement so that what is said here can not be misunderstood. 

Providence is a manufacturing center and one of the most important in the country. 
We do not consume the goods we manufacture beyond a very small percentage of 
our output but ship them to all parts of the United States and, indeed, to the entire 
world. We do not produce the raw material used in the manufacture of our products. 
It is because of these conditions that our success and development depend to a very 
large extent upon our railroads and upon the transportation facilities afforded us by 
water and by rail. 

To-day we have one railroad corporation in our State that controls all of our railway 
transportation lines, including our suburban routes, and practically controls transpor¬ 
tation to and from this port by water. For many years our merchants and manu¬ 
facturers have felt the pressing need of additional transportation and commercial 
facilities, and when the Grand Trunk Railway interests announced their desire to 
enter the city of Providence and to establish there a tidewater terminal, the news 
was received with the greatest satisfaction, and everything that could be done to 
encourage the new enterprise was at once made the object of our activities. 

On January 4, 1910, the city council of Providence created a joint special com¬ 
mittee to confer with Grand Trunk officials relative to the entry of that road into the 
State and city to tidewater. At that conference Vice President E. H. Fitzhugh, of 
the Grand Trunk, stated that if the people of Rhode Island wanted the Grand Trunk 
interests to build a railroad in this State the road would cooperate with us to that 
end, and he expressly asserted, and with emphasis, that if a charter for the Grand 
Trunk’s branch line in this territory, which was to be known as the Southern New 
England, was obtained no traffic arrangements that any other railroad could offer 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 25 


would prevent the Grand Trunk management from building the proposed road in 
this State and carrying out the Canadian road’s agreements with the State of Rhode 
Island and the city of Providence. The record of the Grand Trunk was declared to 
be that its word had never been broken, and that the road always carried out its 
agreements to the letter. 

On the strength of the statements made by Mr. Fitzhugh in this interview, the 
city council committee recommended to the council the passage of a resolution, 
which was adopted, authorizing the joint special committee to appear before the 
legislature and at any public hearings that might be conducted and advocate the 
granting of a charter for the building of the Southern New England. 

At the first public hearing given by a committee created by the State legislature 
the attendance of our merchants and manufacturers was large, and members of our 
city government, including the mayor and the city solicitor, recommended most 
heartily the granting of the petition of the Grand Trunk interests for a charter for 
the Southern New England. The only opposition to the charter at that hearing 
came from attorneys representing the New York, New Haven & Hartford Railroad Co. 

The legislature granted the prayer of the Grand Trunk interests for a charter for 
the Southern New England in Rhode Island. At the next session of the legislature, 
in 1911, certain amendments to the Southern New England’s charter were asked for. 
One in particular was requested by the city of Providence, to the effect that the 
Southern New England be permitted to use the tracks of the Harbor Junction branch, 
so called, of the New Haven road to tidewater. 

This was opposed by the New Haven road’s representatives, who prevailed upon 
the legislative committee having the amendments under consideration to reject this 
proposition. The result is that we have parallel railway lines running through a 
residential section of the city that adjoins one of the most beautiful parks in the 
country, and that part of our city has been disfigured beyond description and entirely 
without need, as the Harbor Junction branch is not overloaded, only 7 trains in 24 
hours passing over its tracks. 

Our people have submitted to have their city disfigured without complaint, real¬ 
izing that it meant transportation facilities which had been so long needed and 
hoped for; but when work on the Southern New England was halted in the early 
part of November,, without any satisfactory explanation, our people became indig¬ 
nant, and this attitude became greatly enhanced when it was freely reported that 
negotiations were pending between the Grand Trunk and New Haven interests, and 
that new traffic agreements between these two roads were to be the price of an entire 
abandonment of the work of building the Southern New England. 

On November 13, 1912, .a conference was held between representatives of various 
State and city interests and officials of the Southern New England, and President 
E. H. Fitzhugh, of the latter road, was asked for an explanation as to the cessation 
of the work on that line. The only statement which Mr. Fitzhugh would make was 
that the work had been ordered halted by the management of the Grand Trunk 
Railway System, a statement which was inadequate and wholly unsatisfactory. 

I therefore communicated with President E. J. Chamberlin, of the Grand Trunk 
system, calling his attention to the condition in which our highways had been left 
as a result of the Grand Trunk’s building operations in this city, which had been 
ordered halted, and asked him to advise me when operations at building the road 
would be resumed. His answer was an evasive one and dodged the main issue. 
Again I telegraphed him that we must have a definite answer to the question if work 
on the Southern New England would be resumed in Rhode Island in the spring of 
1913. His reply was as follows: 

“As already advised, the Southern New England was closed for the winter as a 
precautionary measure. Owing to the hostility of the New England people and press, 
it would be impossible for me to state what effect it may have on the action of our 
board of directors.” 

This is a most extraordinary statement, as the hostility of the New England people 
and press is not against the building of the railroad but against the entering into 
negotiations and agreements that would involve the abandonment of the Palmer to 
Providence branch, in direct violation of the Grand Trunk’s pledges to and agree¬ 
ments with the State of Rhode Island and the city of Providence. 

In addition to this statement, I wish to present for your considera¬ 
tion copies in full of the communications I have had with the presi¬ 
dent of the Grand Trunk system. 


26 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The communications referred to are as follows: 

Southern New England Railway Co., 

, Providence, R. I., June 7, 1912. 

Hon. Henry Fletcher, Mayor, City. 

Dear Sir: In connection with the construction work of the Southern New England 
Railway Co. there is a certain work, such as the handling of water mains, sewers, 
repaving streets, which it is expedient for the city to do. The Southern New England 
Railway Co. will pay the city for doing this work on bills to be rendered from time to 
time as the work is performed. 

Very truly, yours, John S. Murdock. 

The above is a true copy of the original letter received from John S. Murdock by 
Mayor Fletcher. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


City of Providence, Executive Department, 

City Hall, November 18, 1912. 

Mr. E. J. Chamberlin, 

President of the Grand Trunk Railroad, Montreal, Canada. 

Dear Sir: It is my duty officially to inform you that the cessation of work on the 
Southern New England branch of the Grand Trunk has left this city, in company with 
other parts of the State, in a torn-up condition that is utterly unwarranted and is a 
disgrace to the name of any corporation repsonsible therefor. Certain of our highways 
have been rendered unsafe for travel and many of our sewer and water mains, together 
with the equipment of other public utilities, have been seriously disarranged. 

These conditions, which in certain localities not only set at naught the convenience 
and comfort of our citizens but even imperil their lives, can not be permitted to 
continue. 

It is necessary therefore that you furnish definite and positive information as to 
whether your company intends to proceed with the completion of the work of con¬ 
structing the Southern New England, or whether you and your associates propose to 
abandon the project. 

The city of Providence has been called upon to incur heavy expense as a result of 
agreements made with your representatives and based upon the strongest assurances 
that the road would be built, and in the event of an abandonment of the work it will 
be necessary to take legal steps to protect the interests of the city and its citizens. 

Our people are not only grievously disappointed at .the turn the enterprise has 
lately taken, but they are fired by a just indignation that promises and pledges so 
widely and so openly made should be in danger of being broken, and they are in no 
mood to be trifled with in this matter. They are by no means satisfied with statements 
bearing on the situation which purport to have come from you, and they are demand¬ 
ing that all doubt in the premises be cleared away and that the agreements and pledges 
of the promoters of the undertaking be fulfilled to the letter. Public mass meetings 
are being conducted and civic and business bodies are joining their emphatic protests 
with those of the entire citizenship against an abandonment or even any prolonged 
postponement of the work. 

I can not make too emphatic my request that with all possible dispatch you inform 
me, as mayor of the city which stands to sustain the greatest damage and to suffer the 
heaviest loss from a cessation of this work, as to the purpose of your company relative 
to the completion of the Southern New England branch of the Grand Trunk road in 
Rhode Island. 

Very truly, yours, Henry Fletcher, Mayor. 

The above is a true copy of the original letter sent to E. J. Chamberlin by Mayor 
Fletcher under date of November 18, 1912. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 



N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 2? 

Grand Trunk Railway System, 
Montreal, Quebec, November 20, 1912. 

Mr. Henry Fletcher, 

Mayor Providence, R. I. 

Dear Sir: I have your favor of the 18th; contents noted. 

Work on the Southern New England Railway was closed for the winter. At the 
time this matter v^is discussed with Mr. Fitzhugh and Mr. Jones the latter stated 
there were some highways that were in bad shape from the fact that work had not 
been fully completed, which would inconvenience the public, and he was instructed 
by Mr. Fitzhugh to continue such work, placing the streets in proper condition, and 
I have no doubt this is being attended to. 

Yours, truly, E. J. Chamberlin, President. 

The above is a true copy of the original letter received from E. J. Chamberlin by 
Mayor Fletcher. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


Providence, R. I., November 21, 1912. 

E. J. Chamberlin, 

President Grand Trunk Railway System, Montreal, Canada: 

Your letter, evading main issue, says construction railroad closed for winter. Must 
have definite answer to question whether work on Southern New England will be 
resumed in Rhode Island in spring of 1913. 

Henry Fletcher, Mayor. 

The above is a true copy of the original telegram sent to E. J. Chamberlin by Mayor 
Fletcher under date of November 21, 1912. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


[Telegram.] 

Ottawa, Ontario, November 22, 1912. 

Henry Fletcher, 

Mayor Providence, R. I.: 

As already advised, Southern New England was closed for the winter as a precau¬ 
tionary measure. Owing to the hostile attitude of the New England people and 
press, it would be impossible for me to state what effect it may have on the action of 
our board of directors. 

E. J. Chamberlin. 

November 23. 1912—11.45 a. m. 

The above is a true copy of the original telegram received from E. J. Chamberlin 
by Mayor Fletcher. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 

Mr. Fletcher. There may be some other matters which Congress¬ 
man O’Shaunessy is interested in, and I understand that he wishes 
to ask certain questions at this time relative to the general subject 
under discussion. 

Mr. O’Shaunessy. I want to ask you about the alleged imposition 
of a head tax of 25 cents upon people coming into Providence by the 
Fabre Line of steamships. 

Mr. Fletcher. That is a very imporatnt point and has consider¬ 
able bearing upon the general question. Two years ago the Fabre 
Line signified its intention of making Providence a port of entry. 
Several of our officials looked over the ground in order to find out if 
it was possible for the Fabre Line to get accommodations there. The 
New Haven system, which controls the greater portion of the avail- 




28 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

able property for such purposes, had a pier that it said might be used 
temporarily for the landing of passengers. I will state further, and 
I want it to be distinctly understood, that this tax of 25 cents per 
capita or head is in lieu of rent. The Fabre Line is not permitted to 
discharge freight, but their freight is carried back to New York and 
then reshipped to Providence. This is only a temporary affair, 
however, as the Federal Government, some few years ago, made an 
appropriation of $459,000 for dredging and widening the Providence 
Harbor, providing, however, as I recollect the act, that the city and 
State should spend an equal amount in improving the Providence 
River and Harbor. As a result of that condition that was placed upon 
us, the State appropriated $500,000 to build a pier, which we are.now 
constructing, and that pier will be ready some time before the 1st of 
July. In addition to that the city of Providence has appropriated 
$750,000 to build a dock. In addition to that, at the last election 
the people voted a new harbor # loan of $1,000,000. 

Now, all of these things enter into this general question of railroad 
facilities. In view of the money spent by the Government, the State 
and city, aggregating, as it does, millions of dollars, we need all the 
railroad facilities that it is possible to get, and it would be vitally 
against the interests of this great community, which stands so high in 
this country, if we are to remain as we have remained all these years, 
at the mercy of one corporation. That corporation may be fair. I 
am not here to say that it may not be, but it would be unfortunate to 
be placed practically at the mercy of one corporation and bottled up 
under the control of one large concern. It seems to me that it is of 
the utmost importance, if it is possible to break off these negotiations 
and agreements that are apparently being contemplated so that this 
manufacturing community may have the benefit of railroad facilities 
which will enable them to ship and to receive goods at a minimum 
cost, that it should be done. 

Mr. O’Shaunessy. Is it your opinion that these appropriations 
which have been made by the Federal Government, the State, and 
the city, in the final analysis, are made for the benefit of one corpora¬ 
tion ? 

Mr. Fletcher. That is what it means. 

Mr. O’Shaunessy. I will now ask Mr. Albert A. Baker, the city 
solicitor of Providence, to address the committee. 

STATEMENT OF HON. ALBERT A. BAKER, CITY SOLICITOR OF 
PROVIDENCE, R. I. 

Mr. Baker. Mr. Chairman and gentlemen of the committee, I am 
not here to make any general denunciation of the New Haven Rail¬ 
road system, nor to criticize its financial management. Under the 
present management of that system, many great improvements have 
been made and many more are now impending, involving enormous 
amounts of money. The last proposed improvement which has been 
definitely determined is the electrification of the railroad from Provi¬ 
dence to Boston. As representing the city of Providence, we are here 
with reference to a single matter, but with the broadest possible con¬ 
sequences involved, namely, this astonishing cessation of work upon 
the Southern New England Railroad. In order to economize your 
time, and for that purpose only, I have reduced to writing the com- 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 29 


paratively few facts involved here and some deductions based upon 
the facts, for your consideration: 

The salient facts relative to the Grand Trunk’s entry into Rhode Island are few and 
mostly contained in public records and are undeniable. Its officers and representa¬ 
tives applied for the admission of a subsidiary company to be chartered by the State 
and to be organized and financed by the Grand Trunk through the medium of its sub¬ 
sidiary, the Central Vermont Co., or in some other way. 

Representatives of the New Haven Co. at the outset claimed to representatives of 
the State and the city of Providence that the proposition was not made in good faith, 
but as a means to the end of securing a traffic entrance into the city of New York. 
When this claim was brought to the attention of the Grand Trunk representatives, 
Mr. Fitzhugh in the beginning and later other officers and representatives of the 
Grand Trunk system, including President Hays, said it was false. From time to time 
the most positive assurances were given that if admitted to the State and city the 
railroad from Palmer to Providence would be built. Everyone was defied to show that 
the Grand Trunk had ever broken its promise or faith when definitely and publicly 
given. The alleged calumny upon its good faith was refuted so vehemently, repeat¬ 
edly, and publicly that the Grand Trunk Co., in effect, proclaimed to the world that 
its honor and financial standing in respect to its intention and ability to build the 
railroad were attacked, and pledged its faith to build the road. These statements were 
convincing, as apparently made by honest men who knew they had authority to 
represent the Grand Trunk system, and who intended to carry out fully its engage¬ 
ments. 

The charter for the Southern New England Co. was obtained, it was financed through 
the instrumentality of the Grand Trunk. Contracts for building the road were let 
and also for building two passenger steamers to ply between Providence and New York. 
The city granted trackage rights in Allens Avenue, along the harbor, and all the details 
of a long term lease from the city to the company of 900 feet of the city dock now under 
construction and adjoining lands, comprising more than 500,000 square feet, to be used 
as a coal and heavy freight terminal, were arranged. The lease was drafted and its 
execution authorized by the city council. 

The company has spent for organization expenses, land damages, and road con¬ 
struction in Rhode Island and Massachusetts about one and one-half million dollars. 
If the work is abandoned, it is estimated that an additional million and a half dollars 
will be required to pay further damages and expenses. The cuts and fills of the road¬ 
bed through Rhode Island are largely completed. Large expensive bridges have 
been fully or in part built, and other smaller ones completed. 

Judging only in the light of visible facts showing the extent and state of the con¬ 
struction of this road, and the unavoidable further liabilities connected therewith,; 
and assuming that its Grand Trunk sponsor is not without financial resources, to per¬ 
manently stop the work at this stage would be so inconsistent with any business 
principles and so grossly unreasonable and profligate as to brand those responsible as 
incompetents and fit subjects to be set up in effigy on a monument to folly. 

Therefore, reasonably, it is openly claimed that special inducements have been 
offered the Grand Trunk to abandon this road and the present president of the Grand 
Trunk had publicly admitted that other considerations have intervened in the form 
of some kind of a traffic alliance to be made with the New Haven Co. which to the 
Grand Trunk may justify its abandoning this undertaking. 

But there can be no justification in this case. At the inception the reasons and con¬ 
siderations which led to admitting the Grand Trunk system to the State and city were 
made plain, and the State and city have performed and are ready to perform all their 
parts of the agreement and the Grand Trunk and its subsidiary company are in duty 
bound to perform the agreement on their part. If they don’t they will inflict a 
grievous injury upon this State and many of its citizens without compensation of any 
kind. There are some contracts of such a nature, especially when executed in part, 
that in equity and good conscience specific performance is the only adequate remedy, 
After embanking lands, digging ditches, and making a railroad bed through a State, 
with all the resulting public disturbance and incidental damages to adjoining and 
neighboring property owners, the operation of the railroad is the only justification and 
consideration to the public. 

Under the circumstances of this case, if the Grand Trunk’s pledges are broken, it 
will be a lasting exhibit of unparallelled corporate perfidy shocking to all honest men. 
Such a notorious default ought to be and will prove to be a great injury to the Grand 
Trunk system. The stockholders could not approve a management responsible for 
covering its name with odium. 

Further, if the Grand Trunk should be influenced to abandon this undertaking by 
any rewards or indemnities, emanating from the New Haven Co., such a flouting of 


30 N. Y, y N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


the public will lead to the indictment of both companies before the all-powerful bar 
of public opinion and punishment of some kind will surely follow. 

The railroad servant is not greater than the public master. Every public-service 
corporation, to which a part of the public power has been delegated, is a trustee for 
the public. Its stockholders are entitled to reasonable and liberal financial returns 
for undertaking and performing the public service intrusted to it. But such a corpora¬ 
tion is not entitled to usurp any power not intrusted to it by the State, and has no 
right to prevent the public from employing another railroad servant or to induce such 
other servant to abandon its duty. Some axioms bear repetition and need to be 
repeated. 

Whatever the arguments in favor of the consolidation and unity of railroad manage¬ 
ment and service, and whatever the developments and great improvement of railroad 
service as a whole during the last two decades, monopoly in all ages has been odious. 
Generally its practices have been tyrannous and its services inadequate. Its inherent 
defects are ever impelling it to disintegration. Even natural monopolies will not be 
long tolerated by the public, unless more equitably conducted. The public standard 
has advanced and the present age demands that the public trustee shall do equity 
and not abuse its power, and a mere avoidance of the policeman is not considered 
sufficient. Whatever excuses may be made for them, it is evident that it is very 
difficult for railroad managers exercising great powers to realize that they are servants 
not only of their stockholders but also of the State. 

If in this case the claim is true, that these great corporations and their managers so 
far have forgotten their duties as to conspire against the public rights for their own 
pocket advantages, with the intention to defeat the policy and will of sovereign States, 
definitely expressed by their legislatures, it is a challenge to the public power which 
can only be accepted. If not, public authority and law will be held in poor esteem 
by the multitude. 

The real issue in this case is, Shall the will of two great corporations prevail and 
dominate over the will of the people of two or more of our States? If the alleged 
conspiracy has been entered into, the Sherman antitrust law may afford a remedy. 
Whether that is so or not, the subject matter here is worthy of the attention of the 
Congress. If such a conspiracy has been merely hatched, it is an ominous portent 
fraught with peril. It is a blow to the stability of all raliroad corporations in the 
United States. It advocates State ownership of railroads with all the natural con¬ 
sequences and disadvantages. It indicates that it may be necessary to subject rail¬ 
road corporations to having public representatives on their boards of directors, and to 
subject their operations to a wider publicity and to a greater public control than at 
present. 

The appropriate remedy can only be determined after a thorough investigation. 
It raises a question of public policy that can not be determined by court proceedings. 
If the managers of two such great railroad systems can not be trusted, if contemptuous 
of public authority they can not see further than the possible loss or gain of some 
dollars, if they can not rise above a narrow policy and execute their great trusts with 
justice and equity to the public, then their managements necessarily fail and some 
remedy or check must be found. Congress seems to us the appropriate body to act, 
as such symptoms indicate a disease not confined to a single State, and which to 
combat requires the broad authority of Congress. Let us hope that a full and untram¬ 
melled investigation by a committee of Congress will be made, and that its results 
will reassure the public mind. If it should be disclosed that the public judgment 
has been to any extent premature, so much the better. Such an investigation can not 
fail to make these corporations and their managers see their duties to the State more 
plainly, and may lead to a satisfactory adjustment or to a readjustment of the rela¬ 
tions of these and perhaps other railroad corporations with the State and the United 
States. 

Mr. Hardwick. Will the gentleman permit me to ask him two or 
three questions at this time? 

Mr. Baker. Certainly. 

Mr. Hardwick. I understood you to say during the reading of that 
paper that a court proceeding would be entirely inadequate in this 
case, and that, therefore, a congressional investigation was necessary ? 
Mr. Baker. Yes, sir. 

Mr. Hardwick. Now, is it contended, or is it your idea— I am 
simply trying to get information now—that the State and Federal 
statutes are inadequate to meet this situation? 


Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 31 

Mr. Baker. I do not know whether you refer to a criminal remedy 
or a civil remedy. 

Mr. Hardwick. Well, either, or both. 

Mr. Baker. I have no confidence in a criminal remedy. 

Mr. Hardwick. Well, what about the civil remedy? 

Mr. Baker. Without going into the reasons for my opinion, which 
will not interest you, perhaps, in this particular case, from my 
knowledge of this matter and from the information I have of the way 
in which these gentlemen approached the city of Providence, 1 do not 
believe that remedy would be adequate. Now, as I have said, when 
these gentlemen approached the city of Providence, and in the course 
of this thing from the beginning, I do not think that the railroad 
managers reduced anything to writing, and I do not think that they 
do so m relation to matters of this kind at any stage. As to the civil 
remedy, that is an uncertain situation. There can be to a certain 
extent a civil remedy, but it is to a very limited extent. Now, of 
course, where there is a definite public interest, such as a highway 
crossing, where there are two easements which are subordinate to 
each other, in such cases, a court of equity would have authority 
to require the putting of the highways back at least into the con¬ 
dition they were in at first. That is my opinion, but as to the com¬ 
pletion of this railroad, I do not see how there can be any remedy 
afforded. 

Mr. Hardwick. The idea I had in mind was this: I know from 
what you say that you apprehend that the power of Congress to order 
investigations of this sort is based exclusively on the proposition that 
an investigation is necessary in order to determine what course Con¬ 
gress shall take in reference to the enactment of new statutes on the 
subject. 

Mr. Baker. Yes, sir. 

Mr. Hardwick. And that is the reason I was interested in your 
paper: and that proposition, of course, is fundamentally sound. Now, 
applying that principle to this case, is it your judgment—I have not 
been able to hear all the gentlemen who have made statements before 
the committee—that the conditions there are of such a nature that 
an examination into them will disclose to us reasons for passing some 
new law to meet these conditions, and to give a more complete and 
adequate remedy than is now afforded under the existing statutes? 

Mr. Baker. I can only say this: This is the most astonishing 
course of procedure on the part of the management of two corpora¬ 
tions of that size that did not actually involve the cheating of the 
Government or the cheating of somebody out of money that I have 
ever heard of. You gentlemen can not appreciate what a shock and 
blow these developments have been to our citizens generally, irre¬ 
spective of party. There is no politics in this matter. We are Re¬ 
publicans, or the most of us are. 

Mr. Hardwick. Let me state it in another way: If the existing law 
is perfectly adequate to deal with this situation, and if the executive 
branches of the Government charged with the vindication of the law 
by prosecutions are proceeding with reasonable promptness and dili¬ 
gence to perform their functions, and there is no necessity for Con¬ 
gress to pass any other laws to meet the situation, then what neces¬ 
sity can there be for an investigation by Congress ? 


32 1ST. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Baker. I have tried to point it out. We have brought this 
matter direct to your body because of the faith we have in the 
remedy of publicity, because, after all, public opinion is generally 
the only law that prevails for any length of time in this country. 
Now, my thought is this: If you can not trust the managers of these 
two great roads—and the management of the New Haven road has 
been in many respects admirable in its past history—why, it looks 
as though there was a need of impressing upon the railroad manage¬ 
ments a sense of their duty to the public in some more definite form 
than we have to-day. The regulation of rates is only one matter, 
gentlemen, as shown in this case. As I said in’ the beginning, we are 
not here advocating the taking away from any department of the 
Government any of its functions or interfering with any investiga¬ 
tion now properly in progress. We, representing the city of Provi¬ 
dence officially, are only here because of this most astonishing situa¬ 
tion in which we find ourselves and our community. Now, there are 
very few facts involved here, and an investigation along the line of 
these facts would all lead to one issue. I am speaking here only as 
I am authorized to represent the city of Providence. 

Mr. Pou. You think this is an exceptional case in this respect, 
that the Grand Trunk system agreed to build this extension and got 
certain concessions from the city of Providence upon the faith of 
that agreement, and that they have now abandoned the building of 
the extension ? 

Mr. Baker. Not only that, but as shown from the statement of 
the mayor, the city and State have gone ahead and expended enor¬ 
mous sums of money for our community, for the improvement of 
the dockage and wharfage facilities, upon the faith of this agree¬ 
ment. The situation is rather stronger than you have stated it. 

Mr. Pou. You want them to build the Palmer extension or give a 
good reason why they do not build it ? 

Mr. Baker. If they do not build it, and if that is not a satisfac¬ 
tory answer, gentlemen; if something is not done in regard to it, 
what is going to be the result? Perfidy on the part of railroad 
corporations in the United States will be indorsed in effect by 
nonaction. 

Mr. Hardwick. Unless you have some specific complaint against 
the existing law or against the enforcement of the existing law by 
the present administration, why is there any necessity for a con¬ 
gressional investigation ? In other words, unless you can show that # 
the existing law is inadequate in some respects, or that the admin¬ 
istration of the existing law is imperfect in some respects, why 
should there be any congressional investigation of this matter ? 

Mr. Baker. Do you think, sir, that if the public had a representa¬ 
tive on the board of directors of the New Haven system this could 
occur ? Of course, the remedy is for you to find out. I have troubles 
of my own. You are representing the public in the solution of these 
great problems involved in the proper control and management of the 
railroad systems of this country and in carrying on these systems 
under their present methods of financing. Now, unless something is 
done to improve these methods, gentlemen, they are going to break 
down; they are going to break down in this country, and we will be 
obliged to adopt drastic laws which will be a great injury, not only to 
the railroads and their stockholders, but they will possibly result 
in great trouble for the Nation. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 33 

The Chairman. Have you examined the resolution under which 
the Committee on Banking and Currency are investigating the Money 
Trust, and do you think that this proposition that you have now 
before the Committee on Rules might be investigated under that 
resolution ? 

Mr. Baker. I have not examined the resolution. 

The Chairman. It strikes me, without meaning to express an 
opinion about it, that it would be worth looking into, and there might 
be something done in that direction. 

Mr. Baker. The notice of this hearing was given us only on Friday, 
I think. That was my earliest information of the matter, and I 
have not looked into that resolution. My single point is this, gentle¬ 
men, that there is something here different from anything I have 
ever heard of in the United States of America in reference to railroads. 
It involves the question of whether railroads can be trusted funda¬ 
mentally. Here is the Grand Trunk management, representing hun¬ 
dreds of millions of dollars, and the New Haven system, representing 
the same. Now, if they can not be trusted fundamentally, there 
ought to be some remedy provided, not only in favor of the public, 
but in favor of the railroads themselves and their stockholders. 
Gentlemen, you know what has been the course of railroad history 
in this country during the past 10 years much better than I do. 
This, gentlemen, is a moral protest as much as anything else. I have 
made one suggetion only as to what might be possible or might be 
wise to enact into law. Why can not the public have some right to 
know what is going on underneath in the financial councils of these 
great corporations which represent almost States within States ? 

Mr. Lenroot. With reference to the violation to the Sherman law, 
speaking of the civil side, the only remedy there rests in the broad 
powers of a court of equity and in a wide discretion on the part of the 
administrative department of the Government, and I think your sug¬ 
gestion is that this investigation might disclose a condition of affairs 
that would call for a statutory remedy. 

Mr. Baker. That is my whole point. 

The Chairman. Then, I assume, that the Department of Justice 
in investigating this matter is governed, of course, by laws already 
in existence, while a congressional investigation might go much 
further than that, looking to the necessity for additional legislation, 

Mr. Baker. Mr. Chairman, I presume you are a lawyer. 

The Chairman. Yes. 

Mr. Baker. I have been responsible for a criminal docket for over 
20 years, although I have not been in the criminal court for probably 
15 years, and all my experience and knowledge of these matters go 
to one point, and that is, that under the technical rules of law in 
relation to the trial of criminal cases, you do not many times, nor, 
perhaps, even in a majority of cases in this country, arrive at all the 
degrees of responsibility, and the facts involved in criminal offenses 
are almost impossible to get at. Now, in an untrammeled investi¬ 
gation by Congress, with nobody under indictment, with its broader 
power and independence of technical rules of evidence, the committee 
would perhaps confer with railroad men. Now, railroad men know 
the deficiencies of their system. Many times they know better than 
they do, but if they are allowed to do certain things, they will do them. 
One of the chief troubles in this country to-day is due to the fact 
72177—13-3 


34 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

that some man not in touch with public opinion, and who does not 
care anything about it, dictates the action of the men in front who 
have to bear the brunt of the fight. These men remain in the back¬ 
ground and care nothing for public opinion. That was the trouble 
m this case, and if you will investigate it, you will find it out, in my 
opinion. 

No court in the land would ever find it out. They can not do it 
under the rules of criminal evidence nor under the rules of civil 
evidence, but I believe that an investigation made by Congress will 
bring out these facts, and that the committee making the investiga- 
tion will report that to be the fact in their opinion. I think such a 
committee would report that in their opinion the facts are as I have 
stated them to be. 

Mr. O’Shaunessy. I now present Mr. Frederick L. Pierce, of the 
city council of Providence. 

STATEMENT OF HON. FREDERICK I. PIERCE, CHAIRMAN OF 

THE COMMITTEE ON THE SOUTHERN NEW ENGLAND RAIL¬ 
ROAD OF THE CITY COUNCIL OF PROVIDENCE, R. I. 

Mr. Pierce. Mr. Chairman and gentlemen of the committee, with 
your permission I will read my statement. 

As chairman of the committee on the Southern New England Rail¬ 
road of the city council of Providence, I am directed to appear before 
you to urge you to recommend the passage of House resolution No. 
718, which provides for an investigation of the causes for stopping 
work on the Southern New England Railroad. 

The committee which I represent feel that certain facts and records 
should be placed before you, showing that representatives of the 
Southern New England Railroad appeared before the committee of 
the Providence city council and asked for the privilege of coming into 
our city, asked for the aid and cooperation of our citizens, and prom¬ 
ised to build and maintain a railroad without the aid or interference 
of any competing railroad or corporation. Now, what has happened ? 
Work is suddenly stopped, the citizens are up in arms, disgusted, our 
streets left in a deplorable condition, and the people want to know the 
reason why. They are told that the representatives of the New^ 
Haven Railroad have been in collusion with the representatives of the 
Grand Trunk and Southern New England Railroad Co. to stifle this 
project, which means so much to all in our section, namely, competi¬ 
tion, cheaper freight rates, and better service. 

We ask for this investigation to show our people the real cause for 
the cessation of work, to show up the men who are to blame for 
leaving our city with a wide deep gully from the north to the south, 
to show why our streets should be left in the torn-up and blockaded 
condition, property values lessened, and an enormous bill for coop¬ 
erative work for which the city will be obliged to pay. 

Now, I wish to present to you records of our meeting, together with 
resolutions and records of the Providence city council, also certain 
records of hearings before the committee on corporations of the 
State of Rhode Island before which representatives of the Provi¬ 
dence city council appeared and urged the passage of the act allowing 
the Southern New England Railway to do business in Rhode Island. 
From these records I should like to read a few passages, which will 
take but a few minutes of your time. 


N. Y. f 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 35 


Mr. Baker, the city solicitor, asked: 

If this charter is granted, is there any question as to whether the road will be built 
and prompt steps taken to that end. 

Mr. Fitzhugh. I should say yes. 

Mayor Fletcher. It has been intimated that possibly if you made other arrange¬ 
ments elsewhere, you might drop this end of it? 

Mr. Murdock. I undertand that has been intimated; probably you expected it 
would be, but that ought to put it to rest. 

Mayor Fletcher. I understand from Mr. Fitzhugh that this committee is given to 
understand that there is absolutely no foundation for such rumors? 

Mr. Fitzhugh. Not the slightest. 

Mr. Murdock. I will say that Mr. Fitzhugh told me that there is one thing which 
might keep him from coming here; if they would turn over to him the New York 
•Central Railroad then they might consider "this project; there is no other reason that I 
know of why he would consider going elsewhere. Are there any other reasons, Mr. 
Fitzhugh? 

Mr. Fitzhugh. No. It seems a little strange to me that our good faith should be 
questioned or mentioned, and particularly by the assertions made by the people inter¬ 
ested in keeping us out. We are giving every evidence of good faith that we can. Of 
course my remarks are to emphasize that we are acting in good faith. 

Mr. Murdock. Mr. Hays is willing to have inserted in this charter that the New 
Haven road can not buy this or own it directly or indirectly. I would like to ask if 
there is any lingering doubt in the mind of any member of this committee as to the 
good faith and good intention of the promoters of this railroad? 

Mr. Fitzhugh. If there is any other assurance wanted, we would like to give it. 

Mr. Baker. I don’t see that Mr. Fitzhugh can say anything stronger than he has. 
He denies that there is any collateral matter at all involved in this. So far as he can 
state, from the knowledge of the intentions of the management of this railroad, they 
propose to come in here and stay here, if they can get in here; that the road was big 
enough not to sell out, but to expand further. 

Mr. Murdock. That states your position, Mr. Fitzhugh. 

Mr. Fitzhugh. States it exactly. 

Mayor Fletcher. We want to know if Mr. Fitzhugh has carte blanche, to say to the 
people of Providence what his road will do, from the directors. 

Mr. Fitzhugh. The men who control are deputies. The men who control the des¬ 
tinies of this enterprise have already given themselves to it. 

Mr. Baker. Bid your board of directors pass a vote in favor of this move? 

Mr. Fitzhugh. This will be promoted by a Vermont corporation acting for its 
■directors. They will act and have authorized already the steps I am taking. 

Gentlemen, we want you to recommend the appointment of this 
committee. We want a special committee; we want this committee 
to visit the city of Providence and look over the place, and if we have 
not told you the truth about the situation, you will find it out. I am 
pleased to submit to you this record of our meeting. 

Mr. Pou. You were reading from the minutes of what meeting? 

Mr. Pierce. From the minutes of a meeting at which Mr. Fitzhugh 
and Mr. Murdock were present. 

Mr. Pou. When was that meeting held ? 

Mr. Pierce. On February 3, 1910. 

Mr. Pou. It seems that you had some suspicion at that time that 
there might be something behind this that was not disclosed, and that 
this extension might not be built ? 

Mr. Pierce. We felt that the New Haven road had such a strong 
hold in New England that there was some doubt in our mind as to 
whether they would not interfere and that eventually these people 
would sell out to the New Haven Railroad, as we believe at the present 
time they have done. 

Mr. Garrett. Do you understand that this Grand Trunk Railroad 
represents foreign capital altogether ? 


36 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Pierce. We believe that the capital in that road comes from 
either Canada or England, and that the capital for the Southern New 
England Railroad was Canadian or English. 

Mr. Garrett. Do you think that the capital to build this new road 
came from Canada or England, or do you know anything about that ? 

Mr. Pierce. I do not know anything about that, but that is com¬ 
mon talk. I am not making that statement on authority. 

Mr. Garrett. The board of directors of that road, as I understand 
it, are in London. 

Mr. Pierce. The general board of directors are in London. There 
is a board of directors, I understand, for the Grand Trunk Railroad in 
Canada composed of practically the same men who represented that 
New England road. 

Mr. Garrett. Are there any local directors ? 

Mr. Pierce. Mr. Murdock is the local director and vice president 
of the Southern New England road. 

Mr. Pou. He is the local representative? 

Mr. Pierce. Yes, sir ; he is a resident of Providence, R. I. 

STATEMENT OF MR. NORMAN H. WHITE, OF BOSTON, MASS. 

Mr. O’Shaunessy. Mr. Chairman, I now introduce Mr. Norman H. 
White, of Boston. 

Mr. White. Mr. Chairman, I do not appear here in the capacity of 
a commissioner of the State of Massachusetts; I appear as a humble 
citizen of that State, one who has for a period of seven or eight years 
fought the progress of the greatest monopoly on land or sea that has 
ever been established in this country. It was established, gentlemen, 
contrary to the laws of Massachusetts and contrary to the laws of the 
United States. And while the gentlemen from Providence have been 
advancing this Grand Trunk proposition as a local affair, this whole 
monopoly is as interesting to the city of Boston as to the State of 
Maine; it is as interesting to the city of Portland as to the city of 
Providence. I shall trace this monopoly as it has gone its course 
rejoicing and jeering at the people of the good old Bay State. It was 
my privilege to be for four years chairman of the ways and means 
committee of the house in the Legislature of Massachusetts—four years 
on the committee, and two years as chairman—and what I tell you I 
tell you as a man believing that all I shall tell you is true. I have no 
interest in the New Haven—I mean I have no interest in the New 
Haven road, direct or indirect; I have fought this proposition ever 
since its inception, and I want to present, first, to the committee a map, 
which shows in a very complete way the extent of the New Haven’s 
control of the New England States. You will see over there [indi¬ 
cating on map] it is all red, and now that is all blue. All that is blue 
is New Ilavenized, and, not only that, but everything on the high sea, 
contrary to the laws of the United States, as shown by the suit insti¬ 
tuted by Theodore Roosevelt and vigorously pressed by Attorney 
General Bonaparte and dropped for no good and sufficient reason by 
President Taft a very short time after he assumed office. 

Mr. Foster. Give the reason which President Taft assigned for 
that. Have you the reason there, so that it can go into the record ? 

Mr. White. Yes; Mr. Chairman, I have what the committeeman 
has asked for. I have two letters from President Taft here, which I 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 37 


will submit to the committee, and my answer thereto. In brief, 
President Taft’s letter in answer to mine last April stated that the 
reason that the suit was dropped by the Department of Justice was 
that they were unable to win a suit of this kind; and he further stated 
that the Union Pacific and the Southern Pacific cases, which have 
been pending in the lower courts, were specific examples of a char¬ 
acter showing why they could not win. You know the recent deci¬ 
sions of the Union Pacific and Southern Pacific cases in the United 
States Supreme Court as well as I do. The result is that New 
England lies helpless. The suit was dropped for no good reason, as 
exemplified by these letters, which I will produce later. 

I see by this House resolution that }mu do not alone consider the 
Grand Trunk; and it is the monopoly as established which, with your 
kind permission, I would like to go into. This resolution says: “Said 
committee shall inquire whether said railroad corporation has any 
relations or affiliations or enters into any agreements in violation of 
the aforesaid laws. Said committee shall inquire into the causes that 
brought about the cessation of work by the Southern New England 
Railway Co. on its projected railway in Massachusetts and Rhode 
Island or any other States.” I will present later a copy of the 
United States suit as drafted by Attorney General Bonaparte and 
vigorously pressed by our district attorney, Asa P. French. 

Again, this resolution says “also whether the New York, New 
Haven & Hartford Railroad, through the persons owning its stock, 
its officers or agents, has or has had any relation with the Grand 
Trunk Railway Co. of Canada, the Southern New England Railway 
Co., street railroad companies, steamship companies, or national 
banking companies, trust companies, insurance companies, or other 
corporate organizations or companies, or with the stockholders, 
directors, or other officers or agents of said companies, or with any 
person or persons, which have caused or have a tendency to cause 
any of the results following: 

First. The strangling of threatened competition by preventing the construction or 
operation of new lines of steam railroads, street railroads, steamship lines. 

Second. The restriction or destruction of competition in steam railroad, street rail¬ 
road, and steamship transportation. 

Third. Excessive capitalization of such corporation and the issuing of large bond 
and stock issues not representing real values. 

Fourth. Combinations created by ownership of control by one corporation or the 
stockholders or bondholders thereof of the stock or bonds of other corporations or 
combinations between the officers or agents of one corporation and the officers or agents 
of other corporations by duplication of directors or by other means or devices. 

Fifth. Speculations in stocks and bonds by agreement among officers and agents 
of corporations to depress the value of the stock and bonds of other corporations for 
the purpose of acquiring or controlling same. 

Sixth. Failure to provide safe equipment and roadbed in the operation of said 
railroad. 

So, gentlemen, this inquiry is not in any wise a local one; it per¬ 
tains to the entire of New England. I shall trace it from the Massa¬ 
chusetts viewpoint, and I shall show you the public sentiment 
against the steps taken by the road; how public sentiment was 
absolutely ignored, and how, through a holding device known as 
the Boston Railroad Holding Co., which in itself is illegal and con¬ 
trary to the Sherman Act, a collar of monopoly was established for 
all the New England States by the act of the Massachusetts Legis¬ 
lature in the year 1909. 


38 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Chairman, Massachusetts laws have been, I might well say, 
a model for a great many of our sister States, and way back in the 
years Massachusetts drafted a law which was as distinct and clear 
as any law could be. It said that no transportation company could 
buy or hold, directly or indirectly, the stock or bonds in any other 
corporation, not railroads alone, but in any kind of corporation, 
until said transportation company had obtained permission from 
the legislature. That law was to protect our investors and to pro¬ 
tect our savings-bank funds, and it was to stop that very kind of 
thing that the New Haven has done this thing in defiance of that 
law. There was no penalty. 

From the year 1874 steps gradually were taken. A committee of 
the New Haven directorate, composed of Robert W. Taft, Mr. Brush, 
and the then president of the New Haven system, were ordered, by a 
vote of the directors, to go forth and devise ways and means to con¬ 
solidate the trolleys in New England. With that law of 1874 on the 
books, and that law had been copper riveted three or four times, 
saying that no railroad should indorse the stocks or bonds or debts 
of any other company, that committee reported a method to go forth 
and buy the trolleys. The committee went forth, and because it had 
a charter in Connecticut they said we are not under Massachussetts law 
in Massachusetts, although we have a charter in Massachusetts, and 
acting under our Connecticut charter we will go forth, and through 
various devices we will help ourselves to all the trolleys in Massa¬ 
chussetts that we may deem desirable. Mr. Chairman, it was dis¬ 
covered that three years prior to the year 1905 or 1906 these eminent 
gentlemen, who are now trying to stifle the Grand Trunk, had pur¬ 
chased more than 500 miles of trolley lines in Massachusetts near 
Worcester, in the western part of the State, in absolute defiance 
of the Massachusetts law. They said, we are acting under our 
Connecticut charter, and the attorney general of Massachusetts 
brought suit, and by a unanimous opinion of our good supreme court 
in Massachusetts they were told they were outside of Massachusetts 
law, and they were obliged to give up those trolleys and not to hold 
them further, directly or indirectly. They gave them up and placed 
them in the hands of the New England Investment and Security Co., 
and held them in open defiance of the decision of the Supreme Court 
of Massachusetts for a series of years. Perhaps the eminent counsel 
of the New Haven would dare go before the grand jury in New York 
and state how those roads are held now. 

The gentleman on your right, Mr. Chairman, has asked about the 
status of things now. Our condition is this: This suit was started. 
The suit was stopped for no good reason. We have a bill here, and I 
ask you, Mr. Chairman, is there any more reason now to suppose that 
Mr. Wickersham will resurrect this suit than there was before when 
they stopped it? 

Mr. Hardwick. The statement was made before this committee 
this morning that, acting under instructions from the Attorney Gen¬ 
eral, steps were now being taken before the Federal grand jury in the 
eastern district of New York to prosecute the road for this very trans 
action. Is that correct or not? I am asking for information. 

Mr. White. I do not know whether it is correct. What I say is 
this: The present Attorney General of the United States has already 
examined and analyzed this question, and upon such examination he 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 39 

dropped it. The principal thing that has occurred since then is 
the breaking of the pledge that the Grand Trunk would build into 
Boston and Providence. I ask the committee, is it fair to assume 
that an Attorney General, once having said there is nothing doing, 
would be in a very delicate position if he started action again ? 

Mr. Hardwick. The statement was made here positively that he 
was having this matter investigated before the grand jury for the 
eastern district of New York. 

Mr. White. lie may be investigating it. I do not know what the 
grand jury is doing. 

Mr. Hardwick. It was also stated that the grand jury were 
swearing witnesses and hearing testimony on this very proposition. 

Mr. White. I have read it in the newspapers. 

Now, gentlemen, I want to submit to you a speech by the Hon. 
Robert M. La Follette on this question made on the floor of the 
United States Senate Tuesday, April 12, 1910. I think you will 
find there that Senator La Follette says that a committee of the New 
Haven road were authorized to do as I have said, they were ordered 
to proceed to find methods of buying the trolley lines of New England. 

Mr. Buckland. The trolleys referred to at that time were trolleys 
in the State of Connecticut and not in the State of Massachusetts. 

Mr. White. Whether in Connecticut or not, it made no difference. 
They went out and bought the Massachusetts trolleys. You do not 
dispute that. 

Mr. Buckland. I do not know whether this committee has any¬ 
thing to do with that. 

Mr. White. It is in the resolution. 

Mr. Buckland. No; you are incorrect again. It does not say 
that. It says “to bring under one control trolleys constructed and 
to be constructed.” 

Mr. White. I would like to read the resolution. 

Mr. Buckland. I mean the resolution referred to in Senator La 
Follette’s speech. 

Mr. White. I am referring to this resolution, under which this 
committee is acting. 

Mr. Buckland. I thought you were referring to the one in Senator 
La Follette’s speech. 

Mr. White. That was the question of the absorption of competi¬ 
tive trolleys in New England. As I said, three years previous to 
1906, the New Haven road had purchased more than 500 miles of 
trolleys in Massachusetts, and the attorney general did proceed to 
prosecute and the supreme court did say those trolleys should be 
given up, and they were given up, I believe, and placed in the hands 
of the New England Investment & Securities Co., which was con¬ 
trolled by the New Haven road. 

In the year 1905 this trolley agitation in Massachusetts had assumed 
considerable proportions, and in 1905 the Boston & Maine, which was 
then practically the only competitor that the New Haven had running 
north from Boston into New Hampshire and Maine, and along the 
coast, the Boston & Maine brought in a bill to buy trolleys. They at 
that time had only about 28 i^iles of trolleys, and they said to the 
Massachusetts legislature, “Please let us do legally what the New 
Haven road is doing illegally /’ As a result of that the bill was 
killed, and largelv killed through the efforts of the New Haven road. 


40 1ST. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The New Haven did not want the Boston & Maine to do legally what 
they were doing illegally, and as a result of that killing of that bill, 
Curtis Guild, then governor of Massachusetts, sent in a special mes¬ 
sage, saying: 

I congratulate you on the defeat of a measure that would have sanctioned the pos¬ 
sible consolidation of all possible transportation in Massachusetts under the control of 
a single corporation. The present railroad situation, however, is most unjust and 
inequitable. Our steam-railroad system is forbidden to meet the competition of 
electric street-car lines by purchase or control of their stock, but another controlled 
by men who are not citizens of Massachusetts is not only permitted to exercise that 
privilege but is exerting it to-day to such an extent that healthy competition in 
western Massachusetts is almost throttled. 

Slowly, surely, the control of our own railroads, the control of passage to market of 
every Massachusetts product, the control of the transportation to and from his work of 
every citizen of Massachusetts, is passing from our hands to those of aliens. 

I therefore urge upon you with all the strength that is in me the passage of some 
legislation giving relief from this grave injustice. Let Massachusetts announce that 
transportation within her borders is in the future to be controlled by the people of 
Massachusetts, and not by men beyond the reach of her law and the inspiration of 
her ideals. 

That was Gov. Guild. Later I shall show how the Democratic 
governor, Gov. Douglas, after careful investigation, made a very 
strong statement against the railroads owning trolleys. Later I shall 
show also how Gov. Draper approved of certain holding devices, and 
how Gov. Foss was against them. These governors have been pro¬ 
nounced against the New Haven road securing control. The Boston 
& Maine requested permission to do a thing legally that the New 
Haven road was doing illegally, and Gov. Guild sent in his message 
on June 23, 1906, after a recess committee of the Massachusetts 
Legislature had sat upon the question; and at that time the New 
Haven asked the attorney general of Massachusetts to bring suit, 
and the attorney general did bring suit, and 1 remember very well, 
Mr. Chairman, the day the suit was started. I remember that there 
was legislation brought into the Massachusetts Legislature which 
would be most drastic, in the year 1906, against the New Haven 
outfit. I remember, Mr. Chairman, that counsel for the New Haven 
appeared before the committee of the legislature, the railway com¬ 
mittee and the street railway committee, sitting jointly, and he was 
asked by Chairman Walker, of that committee, who has since been 
speaker of the house of the Massachusetts Legislature, whether or 
not they proposed to buy more trolleys in Massachusetts. 

It was the end of the legislative session, and the members wanted 
to go home, and Mr. Walker, being keen and not trusting the response 
that was made him by counsel that they would enter upon no more 
acquisitions in Massachusetts, asked Mr. Mellen if he would give a 
letter outlining what they would do until this so-called merger prob¬ 
lem was settled. Mr. Mellen said he certainly would, and he went 
away; and,Mr. Chairman, this was the letter that the chairman of the 
joint committee received—it is dated June 27, 1906, addressed to 
.Representative Joseph Walker, Esq., and says: 

My Dear Mr. Walker: I have communicated with Mr. Mellen by telephone and 
got from him the following: 

“Mr. Mellen authorized Mr. Choate to state to the legislature that they will not 
enter upon further acquisitions in Massachusetts other than those already contracted 
for, or build any trolley lines excepting such as are now under actual construction, 
until such times as the merger question has been settled. Mr. Mellen is willing, if 
the committee desires it, to furnish a list of properties already contracted for or under 
construction, to avoid any future misunderstanding.” 

Yours, truly, ‘ Charles F. Choate, Jr. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 41 

Now, Mr. Chairman, our legislature went home with this solemn 
pledge of Charles F. Choate, jr., counsel for the New Haven road. 
They went home, and shortly thereafter the New Haven road went 
out and bought four huge trolley systems, while they were being 
sued by the attorney general; they purchased more than 40 per cent 
of the entire Boston & Maine system, and I ask the counsel if that is 
not a fact. Mr. Chairman, you see, on a major proposition such as 
this, where a solemn pledge was given and the promise was broken, 
counsel for the New Haven road is silent. 

Mr. Buckland. Mr. Chairman, I do not know that you care to have 
me get into any wordy altercations with this gentleman. I assume 
you desire this hearing to be conducted in an orderly manner, but I 
do not like to have such imputations go unchallenged. 

The Chairman. I think that each one of you gentlemen should 
confine himself to his own argument. 

Mr. Buckland. I desire to have it stricken from the record that 
my silence gives consent. 

Mr. White. To substantiate the statement that the consolidation 
was made while the attorney general of Massachusetts was suing, I 
will read to you from a report of Attorney General Malone, dated 
January 21, 1909, and I would like to submit the report to the com- 
mitte. This is from the attorney general's annual report. He said: 

The corporation has also, without the authority of the Commonwealth, in direct 
violation of section 47, between the year 1898 and the year 1907, increased its capital 
stock from $47,500,000 to $121,878,000. And it seems clear, therefore, as the attorney 
general says, “That the policy of the road and the results of that policy are contrary 
alike to the declared public policy of the Commonwealth and the statutes thereof, 
and that the charter and franchise of such corporation is therefore subject to forfeiture, 
and it only remains to determine what can be done.” 

Mr. Chairman, I submit that that was a pitiful condition in which 
to find Massachusetts. First, the trolleys, contrary to Massachusetts 
law, and then while the trolley case was pending the same road pro¬ 
ceeded to take the entire Boston & Maine system, and, incidentally, 
as the attorney general says, increased illegally in Massachusetts the 
capital stock from $47,000,000 to $121,000,000 in round numbers. 

Then, Mr. Chairman, the merger, so called in New England, was 
upon us in leaps and bounds, and, Mr. Chairman, I dare say that there 
was scarcely a hamlet or city in the State of Massachusetts that was 
not really shaken to its foundations on this proposition. I will sub¬ 
mit here evidence of the same. A league of public-spirited citizens 
was formed to agitate a sentiment on this question. I have here the 
list of officers and will insert it at this point. 

It is as follows: 

LIST OF OFFICERS IN THE MASSACHUSETTS ANTIMERGER LEAGUE. 

Chas. H. Jones, president. President Commonwealth Shoe & Leather Co., vice 
president Shoe & Leather Association, director First National Bank. 

George L. Barnes, secretary. Attorney at law, trustee South Weymouth Savings 
Bank, ex-representative in the legislature, insurance recess committee 1906-7. 

Chas. P. Hall, treasurer. Vice president American Hide & Leather Co., vice 
president New England Shoe & Leather Association. 

Henry Abrahams, assistant secretary. Secretary Central Labor Union, member 
executive committee Civic Federation of New England. 

Vice 'presidents— Frank A. Allen, president Oriental Tea Co., Boston; ex-mayor of 
Cambridge. George W. Anderson, attorney at law; counsel Public Franchise League. 
Rev. A. A. Berle, Crombie Street Congregational Church, Salem. M. F. Blanchard, 


42 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

director Northwestern Fisheries Co.; president T Wharf Fish Market Corporation; vice 
president and director New England Fish Co. A. G. Bookwalter, Springdale, North 
Wilmington. Louis D. Brandeis, attorney at law, Boston. John T. Connor, presi¬ 
dent and treasurer J. T. Connor Go., Grocers, Boston. Sidney S. Conrad, Conrad & 
Co., Boston. John A. Coulthurst, attorney at law, Independence League candidate 
for mayor of Boston. William Craig, chairman board of selectmen, Brookline; director 
Fruit and Produce Exchange, Boston. F. F. Cutler, president and director Shoe 
Retailer Co.; president and treasurer Shoe and Leather Reporter. Arthur C. Farley, 
Farley, Harvey & Co.; treasurer and director Boston Merchants’ Association; member 
executive committee Boston Association Board of Trade. A. Lincoln Filene, presi¬ 
dent Wm. Filene’s Sons Co., Boston. John Golden, president United Textile Work¬ 
ers’ Union, Fall River. Frederick W. Hamilton, president Tufts College, Medford. 
John J. Higgins, attorney at law; district attorney for Middlesex County, Somerville. 
Edward F. X. McCarthy, secretary Amalgamated Sheet Metal Workers’ International 
Alliance, Boston. Frank H. McCarthy, general organizer American Federation of 
Labor, Roxbury. Charles E. Osgood, president C. E. Osgood & Co., furniture, Boston. 
Prof. Frank Parsons, Boston. Harvey H. Pratt, attorney at law; former district attor¬ 
ney, South Easton district, Boston. Carleton D. Richardson, worthy master, Massa¬ 
chusetts State Grange of Patrons of Husbandry, West Brookfield. Felix Vorenberg, 
F. Vorenberg & Co., jewelers, Boston. Henry White, president University Press, 
Cambridge. William G. Walker, president Austin-Walker Co.; president and director 
Austin-Walker Manufacturing Co.; director Foster Manufacturing Co., London, Eng¬ 
land; director Stork Co., Brookline. Norman H. White, representative in the legis¬ 
lature from Brookline; treasurer Boston Bookbinding Co., Cambridge; director Win- 
throp Mills Co., Winthrop, Me.; director Clinton Mills Co., Norwich, Conn. 

Here is a letter from the Newport (R. I.) Mercury, outside of 
Massachusetts, which says: 

EXTRACT FROM NEWPORT (R. I.) MERCURY, JUNE 5, 1909. 

The Massachusetts Legislature is beginning to get over its fright in regard to the 
merger of the Boston & Maine and the New Haven Railroads. The legislative com¬ 
mittee has reported in favor of a holding company for the so-called Billard stock and 
provides that the company may be financed by any railroad company. That means 
that the New Haven company may finance a company which shall take over and hold 
the 110,000 shares of Boston & Maine stock that was bought by the New Haven people 
and turned over to a dummy holder in the person of one Billard, of Meriden, Conn., 
when the Massachusetts courts decided that the New Haven people could not hold 
the stock. 

And so on down the line. From Fitchburg we have the following 
extract from the Sentinel of that city: 

EXTRACT FROM FITCHBURG (MASS.) SENTINEL, JUNE 4, 1909. 

It is all right for Gov. Draper to send to the legislature a special message embodying 
his views about a holding railroad company, but when he calls in a member of the 
railroad committee and gets him at the disadvantage of confronting the governor 
and attorney general of the State, then he goes altogether too far. Yesterday few peo¬ 
ple in the State ever heard of Representative John W. Haigis, of Montague. To-day 
he ought to be held in general respect because he refused to change his attitude even 
when under the pressure of the two officials named. 

Then from the New York Journal of Commerce we have the 
following: 

That such a monopoly, under such supervision as Massachusetts could exercise 
would result in improved railroad service is altogether doubtful. That is not the 
usual effect of complete lack of competition. But the greatest danger lies in the 
political power of such a combination. That of both companies has already been a 
scandal, one in Connecticut and the other in New Hampshire and Maine, and if 
Massachusetts can claim superior virtue in that respect it may put itself under’a strain 
greater than it can bear. Perhaps the first test will come in giving consent to the 
merger. If that is given, the dominant factor in all New England politics, so far as 
transportation interests are concerned, is likely to be not the State of Massachusetts 
but the New York, New Haven & Hartford Railroad Co.j 


X. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 43 
We also have this from the Greenfield Recorder, of June 2, 1909: 

EXTRACTS FROM GREENFIELD (MASS.) RECORDER, JUNE 2, 1909. 

The bill permits a railroad company to finance that company, and there is no oc¬ 
casion to question what railroad company it will be. The New Haven road has a 
string attached to the stock held by Mr. Billard and can deliver it to the holding 
company and will do so, provided only and always that it is the company to control 
the holding company. This will complete a circle in the State’s performance: First, 
the New Haven road compelled to part with its stock; next, its ownership by a citizen 
of Connecticut recognized as such a parting, then the suggestion that a company be 
formed to hold it in Massachusetts and the New Haven road’s active interest to have 
this done, then the creation of the company, its financing by the New Haven, the 
return of the stock, and finally the New Haven in possession again. 

******* 

Citizens who have been favorable to the merger and still keep their interest in the 
State uppermost will hesitate to approve the accomplishment by indirection and under 
false colors of the thing the State has stood out against when directly proposed. It 
shows the New Haven road much more masterful than the Commonwealth has yet 
shown itself. 

* * * * * * * 

A much shorter and quite as safe a bill could be framed if the State has come to the- 
conclusion that the New Haven company should have this stock restored to its control. 
It would read: 

“Be it enacted , etc., That the New York, New Haven & Hartford Railroad Co. is 
hereby permitted to buy and hold the stock of the Boston and Maine Railroad.” 

Such enactment would be a bit humiliating after the effort to prevent just this 
thing, but not more so, indeed rather less so, than the attainment of the same end by the 
operation of a bill which creates a tertium quid called into being for no other purpose, 
and under the disgrace that attaches to uncertain parentage. 

Then I want to present to you the resolution of the Brockton Asso¬ 
ciation of Superintendents and Foremen. Brockton is that great 
shoe town. They went emphatically against allowing this Boston & 
Maine merger. 

RESOLUTION OF BROCKTON ASSOCIATION OF SUPERINTENDENTS AND FOREMEN OPPOS¬ 
ING A MERGER OF THE NEW HAVEN AND BOSTON & MAINE SYSTEMS. 

Resolved, That we most emphatically disapprove of the proposed merger of the 
Boston & Maine Railroad with the New Haven system. We can see in this propo¬ 
sition no probability of either lower freight rates for the manufacturer or better service 
to the public. We have learned from observation and experience that the leasing 
and consolidation of railroads is usually brought about by persons interested in the 
manipulation of securities and the profits derived therefrom, and are not undertaken 
in the interests of the people who are called upon to pay the increased charges made 
necessary by such operations. 

The policy of rapid extension and the determined and costly destruction of com¬ 
petition w T hich has characterized the management of the New Haven Co. in recent 
years, , warrants the belief that the monopoly which they seek will not be used for 
the promotion of the transportation interests of Massachusetts, but rather as a means 
of securing for their stockholders dividends on large sums, invested by methods and 
for purposes not in the interests of the people of this State. 

We believe that the great resources of the New Haven railroad and the unquestioned 
ability of its officers can be most fully and profitably employed in the upbuilding 
and development of its present extensive properties, and in the improvement and 
perfection of the details of its service to the traveling public and the merchants and 
manufacturers of this State. 

Be it therefore resolved, That a copy of these resolutions be sent to the president of 
the senate and to the speaker of the house, and to the four representatives of this 
district in the legislature, and that a committee b& appointed to attend the hearing 
before the committee on railroads and present these views. 


44 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


REMARKS OF HIS HONOR, JOHN S. KENT, MAYOR OF THE CITY OF BROCKTON, AT THE 
MEETING AT WHICH THE FOREGOING RESOLUTION WAS ADOPTED. 

Mr. President, guests, and members of this association, I want to thank the three 
gentlemen who have just spoken—officers of the Massachusetts Antimerger League— 
for their clear expressions of the calamity that would result from the control of the 
Boston.& Maine by the New York, New Haven & Hartford Railroad. We in Brock¬ 
ton realize what it means to be a noncompetitive point as regards the great industry 
of this city—the shoe trade. Instead of urging the merger we should advocate before 
the Legislature of Massachusetts the necessity of new railroads in this State to 
encourage competition. The public sentiment of the State is opposed to the merg¬ 
ing of, the New York, New Haven & Hartford Railroad and the Boston & Maine. 
The legislature of this grand old Commonwealth of ours will be true to its traditions 
and not attempt to stifle competition. 

The New England Dealers’ Hardware Association, in convention 
assembled, March 12, 1908, passed the following resolutions: 

Believing that the merger of the Boston & Maine with the New York, New Haven 
<fc Hartford or any other system, and the complete destruction of competition which 
would result therefrom, would inevitably increase the cost of transportation: 

Be it therefore resolved , That our experience has proved that such consolidation of 
other railroad systems operated within our borders has not worked to the advantage 
of merchant and consumer, nor is it in accordance with the well established policy 
of the Commonwealth, therefore it should be made impossible by definite legislative 
enactment. 

Be it therefore resolved , That this association is opposed to any such consolidation 
and that the secretary of this association be authorized and instructed to present these 
views to the governor and representatives and take such further action as may seem 
wise to safeguard the interests of this association in this matter. 

Chas. L. Underhill, Secretary . 

Representative Underhill voted in favor of the merger always. 

And the little town of Hudson, by its board of trade, passed the 
following resolution: 

The Hudson Board of Trade, in regular meeting assembled, do hereby record their 
strong opposition to the proposed merger of the Boston & Maine with the New Haven 
system. 

Whereas we believe that the people of this Commonwealth are entitled to the most 
efficient service, and lowest cost of transportation, from the railroads which they 
support; and 

Whereas they ara assured of this only when there is a reasonable competition between 
railroads, such as does exist at present; and 
Whereas a consolidation of two such big systems would result in a complete monopoly 
most destructive to business interests, hence most detrimental to the welfare and 
progress of the people: Therefore be it 

Resolved, That the Hudson Board of Trade use every reputable method against the 
legislation of this proposed merger. 

New England’s great shoe industry, the New England Shoe & 
Leather Association, in which there is more money invested than 
in any other industry, and the following resolutions were adopted by 
a vote of 200 to 2 against the railroad monopoly: 

Met at Somerset. William Whitman in favor. 

New England is noted for her manufactures. The largest manufacturers’ associa¬ 
tion in New England is the New England Shoe & Leather Association. 

The following resolution was passed by this body at the Hotel Somerset March 10. 
1908. This is what that great body of manufacturers think of the proposed monopoly 
of all transportation in New England in the hands of a few men. 

“ Be it resolved, That the New England Shoe. & Leather Association, representing 
the greatest manufacturing industry in Massachusetts, believes— 

That owing to our geographical situation, remote from our raw material and from 
the market for our finished product, the most efficient service and the lowest possible 
eo3t of transportation is essential to the continued growth and prosperity of our industry. 

“We believe that the system of reasonable competition in transportation which 
has heretofore been maintained by the wise laws of the State, supplemented by the 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 45 


supervision of the Interstate Commerce Commission and the board of railroad com¬ 
missioners, should be preserved and continued, and that any effort to create a monoply 
in the transportation should be vigorously resisted. 

“We believe that the merger of the Boston & Maine with the New Haven system 
and the complete destruction of competition which would result therefrom would 
inevitably increase the cost of transportation, would retard development and needed 
improvements in service, and is contrary to the well-established policy of this Com¬ 
monwealth, and should be made impossible by definite legislative enactment. 

“Be it therefore resolved, That this association is unalterably opposed to any such 
consolidation, and the president of this association is hereby authorized and instructed 
to appoint a committee of three to present these views at all legislative hearings 
bearing on this subject, to present to the governor these resolutions, and take such fur¬ 
ther action as may to them seem wise to protect the interests of this industry in this 
matter.” 


In the agricultural districts, the strongest body of men in Massachusetts, organized 
years ago the Massachusetts State Grange of the Order of Patrons of Husbandry. 
This organization is known throughout New England as one which stands for the 
best interests of Massachusetts in commerce and industry, and especially stands for 
the best interests of the agricultural body. 

At a meeting duly called for the purpose, the Massachusetts State Grange adopted 
the following resolution. This is what this great body of agricultural men think of 
the proposed monopoly: 

“ Resolved , That the executive committee of the State Grange use every effort 
against the proposed merger that will come before the legislature this winter.” 

Yours, truly, 


George L. Barnes, Secretary. 


The business men of Brockton adopted the following resolution 
opposing a merger of the New Haven and the Boston & Maine 
systems: 


RESOLUTION OF BROCKTON BUSINESS MEN OPPOSING A MERGER OF THE NEW HAVEN 
AND BOSTON & MAINE SYSTEMS. 

At a meeting of more than 300 of the business men of Brockton held at the Porter 
Church, Friday, March 20, it was unanimously 

Resolved , That we most emphatically disapprove of the proposed merger of the 
Boston & Maine R. R. with the New Haven system. We can see in this proposition 
no probability of either lower freight rates for the manufacturer or better service to the 
public. We have learned from observation and experience that the leasing and con¬ 
solidation of railroads is usually brought about by persons interested in the manipu¬ 
lation of securities and the profits derived therefrom, and are not undertaken in the 
interests of the people who are called upon to pay the increased charges made necessary 
by such operations. 

The policy of rapid extension and the determined and costly destruction of compe¬ 
tition which has characterized the management of the New Haven Co. in recent years 
warrants the belief that the monopoly which they seek will not be used for the promo¬ 
tion of the transportation interests of Massachusetts, but rather as a means of securing 
for their stockholders dividends on large sums, invested by methods and for purposes 
not in the interests of the people of this State. 

We believe that the great resources of the New Haven Railroad and the unquestioned 
ability of its officers can be most fully and profitably employed in the upbuilding 
and development of its present extensive properties and in the improvement and per¬ 
fection of the details of its service to the traveling public and the merchants and 
manufacturers of this State. 

Be it therefore resolved, That a copy of these resolutions be sent to the president of 
the senate, and to the speaker of the house, and to the four representatives of this dis¬ 
trict in the legislature, and that a committee be appointed to attend the hearing before 
the committee on railroads and present these views. 

Mr. Chairman, practically every labor union in Massachusetts, 
representing more than 300,000 men, in meetings assembled voted 
against the merger. I will insert there a list of the labor organiza¬ 
tions which passed that motion against the merger. 


46 N. Y., 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The following labor organizations in the year 1908 passed resolu¬ 
tions in meeting assembled against the consolidation of the New 
York, New Haven & Hartford and Boston & Maine Railroads. 

Athol: International Association of Machinists, Lodge No. 750; Retail Clerks, Local 
No. 655; Metal Polishers, Buffers, etc., Union of North America, No. 118; American 
Federation of Labor, Local No. 11891. 

Boston: Amalgamated Society of Engineers, No. 647; Amalgamated Society of Car¬ 
penters and Joiners, Branch No. 2; Amalgamated Brotherhood of Cement and Asphalt 
Workers, Local No. 20; Brotherhood of Painters, Decorators, and Paper Hangers of 
America, Local No. 391; Association No. 3 of Lithographers’ International Protective 
and Benefit Association of United States and Canada; Car Workers of Somerville, 
Lodge No. 108; Division No. 373, Amalgamated Association of Street Railway Employees 
of America; Cabinet Makers and Mill Men’s Local No. 1824, United Brotherhood, Car¬ 
penters; National Federation of State, City, and Town Employees; Grocery and Pro¬ 
vision Clerks of Boston, Local No. 539; Waiters’ Union, Local No. 80; Hebrew Actors’ 
Protective Union, No. 7, Section 2; International Alliance of Hod Carriers Building 
Laborers Union of America; International Union United Brewery Workers of America, 
Local No. 122; Shirt Waist and Laundry Workers International Union, Local No. 66; 
Photo Engravers Union, No. 3; Longshoremen’s Trades Council; Retail Clerks’ Inter¬ 
national Protective Association, Local No. 796; Public Grounds Department Em¬ 
ployees Union, No. 12434;- Mailers Union No. 1; Pattern Makers Association; Hod 
Carriers and Building Laborers Union, No. 209; Local No. 7, Bakery and Confectionery 
Workers Union; International Union of Steam Engineers, Local No. 263; Wood 
Carvers Association; International Alliance of Theatrical Stage Employees of the 
United States and Canada, Local No. 11; Ship Machinery and Derrick Riggers Union, 
No. 10315; Piano, Organ, and Musical Instrument Workers International Union of 
America, No. 21; Custom Tailors Union, No. 12; Roxbury Local Union, No. 16, Inter¬ 
national Union of Steam Engineers; Ladies’ Tailors and Dressmakers Union, No. 36; 
International Brotherhood of Electrical Workers, Local Union No. 103; Furriers’ 
Union; Knights of Labor, District Assembly, No. 30; United Boiler Makers and Iron 
Ship Builders of North America, Local No. 9 of East Boston; Knights of Labor, Local 
No. 7576 of Roxbury. 

Brocton: Dressers and Packers, Local No. 365; Boot and Shoe Workers Union, Local 
No 118; Bricklayers and Plasterers Union, No. 5; Elastic Goring Weavers Amalga¬ 
mated Association of the United States. 

Brookline: Piano, Furniture Movers and Helpers, Local No. 343; 

Cambridge: City Employees Union, No. 8279; Sewer Workers Union, No. 12231; 
^Central Labor Union. 

Chicopee Falls: Central Trades Council. 

Dedham: United Brotherhood of Carpenters and Joiners of America, Local No. 892; 
Stone Masons Union, No. 42. 

East Weymouth: Boot and Shoe Workers Union, Local No. 53. 

Fall River: Loom Fixers’ Association; Central Labor Union; United Brotherhood of 
Carpenters and Joiners of America, Local No. 1305; Musicians Protective Union, No. 
216; Bricklayers, Masons, and Plasterers International Union, No. 11 of Massachusetts. 

Fitchburg: Central Labor Union; International Brotherhood of Paper Makers, Local 
No. 12; International Brotherhood of Stationary Firemen, Local No. 85. 

Foxboro and Norwood: Iron Molders Union of North America, Local No. 323. 

Gardner: Journeymen Barbers International Union of America, Local No. 550. 

Haverhill: International Alliance Theatrical Stage Employees, Local No. Ill; 
United Association Journeymen Plumbers, Gas Fitters, Steam Fitters and Helpers of 
the United States and Canada, Local No. 486; Joint Shoe Council, No. 2, Boot and 
Shoe Workers Union. 

Haydensville: Metal Polishers, etc., of Williamsburg, Local No. 65. 

Hoiyoke:. Brotherhood of Railroad Trainmen, Lodge 557; International Association 
Association of Steam, Hot Water, and Power Pipe Fitters and helpers; Bartenders 
Union, Local No. 81; Musicians Protective Union, No. 144; Typographical Union, 
No. 253; Local Union, No. 4, International Brotherhood of Stationary Firemen; Bak¬ 
ery and Confectionery Workers International Union of America, Local No. 93; Inter¬ 
national Molders Union. No. 115: Carpenters District Council. 

Hyde Park: International Association of Machinists, Local No. 345. 

Lawrence: International Brotherhood of Stationary Firemen, No. 18; Woolsorters 
Union, Local No. 349; International Union of Steam Engineers, Local No. 235; 
International Brotherhood of Maintenance of Way Employees; Loom Fixers Union 
No. 38. 

Leominster: Barbers Union, No. 518; Textile Workers Union, No. 323. 


1ST. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 47 


Lowell: Trades and Labor Council; Typographical Union, No. 310: Bricklayers 
Union, No. 31. 

Lynn: City Employees Union, No. 12326, American Federation of Labor; Local 
No. 1, Edge Makers Independent Union; Amalgamated Association of Street Railway 
Employees of America, Division No. 238. 

Malden: United Association Journeymen Plumbers, etc.. Local No. 145; American 
Federation of Labor, No. 8217; International Brotherhood Teamsters, Local No. 314. 

Mattapan and vicinity: International Brotherhood of Stationary Firemen, Local 
Union No. 242. 

Medfield: Painters, Decorators, and Paper Hangers, Local No. 772. 

Milford: Bartenders Union, No. 96, subordinate to Hotel and Restaurant Employees; 
International Alliance and Bartenders International League of America; Central 
Labor Union; Derrickmen’s Branch Quarryworkers International Union, Local No. 88. 

Milton: Brotherhood Painters, Decorators, and Paperhangers of America, Union 
No. 638. F 6 

New Bedford: Bricklayers, Plasterers International LTnion. No. 39; Tvpographical 
Union, No. 276. 

Newton Center: United Brotherhood of Carpenters and Joiners of America Union, 
No. 680; United Brotherhood of Carpenters and Joiners of America Union, No. 1600. 

Newton: City Employees Union, Local No. 13380. 

Newburyport: Bricklayers, Masons, and Plasterers, Local No. 41. 

North Adams: Shoe Cutters’ Union, No. 163; United Brotherhood of Carpenters 
and Joiners of America, Local No. 193. 

Northampton: Musicians Protective Union, No. 220. 

Pittsfield: United Brotherhood of Carpenters and Joiners of America, No. 444; 
International Association of Machinists, Berkshire Lodge, No. 435: International 
Brotherhood of Teamsters, Local No. 368. 

Plymouth: General Teamsters and Helpers Union, Local No. 332. 

Quincy: Central Labor Union; International Association Machinists, Local No. 108; 
United Brotherhood of Carpenters and Joiners of America, Local No. 762; Interna¬ 
tional Union of Steam Engineers, Local No. 79. 

Rockland: Boot and Shoe Workers Union, Local No. 371; Boot and Shoe Workers 
Union, Local No. 48. 

Salem: Painters, Decorators, and Paper Hangers, Local No. 247; Barbers Union, 
No. 385. 

South Barre and vicinity: Woolsorters Union, Local No. 494. 

South Braintree: Boot and Shoe Workers Union, Local No. 143. 

South Framingham: Bricklayers, Stone Masons, and Plasterers International Union 
of America, Local No. 51. • 

South Walpole: Amalgamated Association of Street Railway Employees of America, 
Division No. 399. 

Springfield: International Brotherhood of Electrical Workers, Local No. 7; Typo¬ 
graphical Union, No. 216; Cigarmakers International Union of America, Local Union 
No. 49; Bartenders, Local No. 67; United Brotherhood of Carpenters and Joiners of 
America, Local Union No. 1105. 

Stoughton, Canton, and Sharon: Brotherhood of Painters, Decorators, and Paper 
Hangers of America, Local No. 754. 

Stoughton: United Brotherhood of Carpenters and Joiners of America, Local No. 
1063. 

Taunton: United Brotherhood of Carpenters and Joiners, Local 1035; International 
Molders Union of North America, Local No. 39. 

Turners Falls: International Brotherhood Paper Makers, etc., Local No. 10, of 
Montague. 

% Wakefield: Piano, Organ, and Musical Instruments Workers International Union of 
America, Local No. 37. 

Waltham: Norumbega Lodge, No. 465, International Association of Machinists; 
Bricklayers and Masons International Union of America, Local No. 15. 

Ware: United Brotherhood of Carpenters and Joiners of America, Local No. 1630. 

Whitman: Boot and Shoe Workers Union, Local No. 425 of Edgemakers; Tree 
Dressers and Packers, Local No. 105. 

Winchendon: Maintenance of Ways Department Boston and Maine, Lodge, No. 62. 

Worcester: Boot and Shoe Workers Union, Local No. 162; Hack Drivers Union, 
Local No. 422; Granite Cutters International Association of America, affiliated with 
Worcester Central Labor Union; International Union Cutting Die and Cutter Makers, 
Local No. 301; International Brotherhood of Teamsters, Local No. 308; International 
Association of Bridge and Structural Iron Workers, Local 57; International Union of 
United Brewery Workmen, Local No. 136; Carpet Weavers Association. 


48 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT* 


Then we have two statements from Commissioner Prouty, of the 
Interstate Commerce Commission. They are as follows: 

NEW HAVEN MONOPOLY FREIGHT RATES. 

(Statement of Interstate Commerce Commissioner Prouty to Massachusetts State Board of Trade. Feb¬ 
ruary 27, 1906.] 

The peach growers of Georgia complained that the rates charged for the transporta¬ 
tion of peaches to New York and Boston were excessive. Under the rates in force 
it cost about $160 to transport a carload of peaches 900 miles from Georgia to New 
York, and it costs $80 more to transport that same carload 230 miles from New York 
to Boston. The testimony showed that this carload of peaches would be taken from 
New York to Boston in a regular daily train of the New Haven Railroad, consisting 
of from 30 to 35 cars, hauled in a single night by a single engine and train crew. It 
also showed that in the same train would be carloads of other perishable commodities, 
as for example, dressed meat, with respect to which the New Haven road performed 
exactly the same service for $30 per car, the difference being that the carload of 
peaches could only reach Boston over the New Haven road, while the carload of beef 
might reach it by several different routes. The commission held that the charge of 
$80 per car was exhorbitant, and recommended that the New Haven Company reduce 
that arbitrary to $50 per car. The railroad complied by making a reduction of one- 
half that recommended, and the present rate is $65 per car above New York. You 
are told that the people of New England can most safely rely upon the magnanimity of its 
railroads for reasonable freight rates. I call your attention to this case as an illustration 
of the sort of rates which result where railroad magnanimity , freed from all competitive or 
governmental restraint , fixes the transportation charge. 

WHAT INTERSTATE COMMERCE COMMISSIONER PROUTY THINKS OF THE VALUE OF 

COMPETITION. 

[Remarks to Massachusetts State Board of Trade, February 27, 1906.] 

Referring to shipments of boots and shoes, he says: 

“The class rates from New England are the same as those from New York, but this 
is not due to any grace upon the part of our New England railroads, but to competitive 
transportation conditions between New England and the West, as was well shown 
by a recent investigation of the commission upon complaint of certain shoe manufac¬ 
turers (in 1904). It appeared in that case that the boots and shoes of New England 
moved largely to points like St. Louis via the Merchant^and Miners’ Steamship Line 
to Norfolk or Baltimore, and from thence by the Chesapeake & Ohio, the Norfolk & 
Western, or the Baltimore & Ohio, as the case might be. The roads of New England 
transported these goods from the factory to Boston, receiving for that service their high 
local rate. The rate which they made to the West was determined by the rates which 
the shipper could obtain over this circuitous route. The railroads of New England 
declined to issue to the shipper a through bill of lading, but insisted upon the payment 
of their local charges to Boston and the issuing of a new bill of lading from Boston, thus 
embarrassing as far as possible the movement of traffic by this cheaper route. This 
of course was good business, but it was not magnanimity. There is very little magna - 
niminity in either business or railroad rates. Where you eliminate competition from either 
the purchaser pays.” 

The boot and shoe business is the largest industry in New England. 

And then we have the reason why the Boston & Maine was needed 
by the New Haven, in this statement: 


A REASON WHY THE NEW HAVEN WANTS THE BOSTON & MAINE—OPERATIONS FOR 
NINE MONTHS ENDING MARCH 31, 1909. 


[Taken from reports to Massachusetts railroad commissioners.] 


The New York, New Haven & Hartford R. R. Co.: 

Net income. $17, 671, 806.19 

Charges.. 14, 829,024. 51 


Balance for dividends. 2, 842, 780. 68 

Dividends paid. 5, 883, 842. 00 


Deficit 


3,041,061. 32 









1ST. Y., 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 49 


The Boston & Main Railroad: 

Net income. $8,739,669.49 

Charges. 7, 219, 845. 37 


Balance for dividends 
Dividends paid. 


1. 519, 824.12 
1,413, 964. 33 


Surplus. 105, 859. 79 

Then this happened at the State House: The Massachusetts State 
Board of Trade came to the legislature and said that this should not 
go through, and the Boston C hamber of Commerce bucked against 
it, and 500 labor men marched up Beacon Hill, and Theodore Roose¬ 
velt instructed the Attorney General to bring suit. 

Then Mr. Louis D. Brandeis and T. E. Byrnes, vice president of the 
New Haven road, had a joint debate on this question before the 
chamber of commerce, which represents more than 3,000 of our great 
business men, and the chamber of commerce voted practically unani¬ 
mously against the merger. These were the resolutions passed: 


RESOLUTIONS PASSED BY THE BOSTON CHAMBER OF COMMERCE RELATING TO THE MER¬ 
GER, AFTER A JOINT DISCUSSION BY MR. T. E. BYRNES, VICE PRESIDENT NEW YORK, 
NEW HAVEN & HARTFORD RAILROAD, AND LOUIS D. BRANDEIS, ESQ., AT WHICH THE 
WHOLE SUBJECT WAS CAREFULLY AND THOROUGHLY CONSIDERED. THE CHAMBER 
OF COMMERCE HAS MADE A MOST CAREFUL INVESTIGATION OF THE QUESTION WITH 
SPECIAL REFERENCE TO ITS PROBABLE RESULTS TO MASSACHUSETTS’S INTERESTS. 
THESE RESOLUTIONS SHOW THE CONCLUSIONS THAT HAVE BEEN REACHED BY THE 
BOSTON CHAMBER OF COMMERCE. 


Resolved, That the Boston Chamber of Commerce is firmly opposed to the proposed 
control of the Boston & Maine Railroad by the New York, New Haven & Hartford 
Railroad for the following reasons: 

1. Because it would place under one control a high percentage of the entire trans¬ 
portation facilities of the New England States, steam railroad, trolley lines, and coast¬ 
wise steam shipping, and because such unification of interests tends to constitute an 
undesirable monopoly. 

2. Because such consolidation, with its inevitable consequences, would eliminate 
all competition, whether of rates, service, facilities, or treatment, and be in itself so 
unwieldy as to decrease rather than increase efficiency. 

3. Because we believe it to be impossible for any legislative restraint or regulation 
to accomplish the ends which legitimate competition provides; and because neither 
the Massachusetts Legislature nor the Massachusetts railroad commission can exert 
any effective jurisdiction in interstate passenger and freight rates or service. 

4. Because past experience proves that such centralized control of great public 
utilities would surely result in a dangerous political and most deplorable industrial 
permanent menace to the entire community. 

5. Because of the probability that the vast increase in fixed charges which suggested 
improvements would compel would inevitably lead to an advance in ra'tes in order 
to afford reasonable return on the investment which no probable increase of domestic 
traffic in New England would suffice to provide. 

6. Because such rehabilitation as the Boston & Maine system requires and any 
probable traffic justifies must be paid for by issue of its own obligations, whether 
bonds, stocks, or notes.. 

7. Because we believe it would be decidedly to the advantage of Boston, Mass., 
and New England to have genuine competition provided by the Boston & Maine Rail¬ 
road, being controlled by a strong trunk line to the West. Such line operating through 
northern Massachusetts, the New York Central operating through central Massachu¬ 
setts, and the New York, New Haven & Hartford Railroad, with its connections, 
operating through the southern section would be of much.greater benefit to the public 
than the proposed control with its elimination of competition. 

8. Because we believe that the proposed control would result in confining traffic 
from the West via New York Central Railroad to Boston & Albany main line points 
and such points as are reached by its own branches. 

9. Because absence of control of the Boston & Maine Railroad is no barrier to sug¬ 
gested or contemplated improvements upon the New York, New Haven & Hartford 

72177—13-4 









50 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Railroad itself, including the electrification of the basement of the South Terminal, 
thus providing for electrical operation of the suburban service as originally intended. 

10. Because the separation of the two systems does not interfere with the rectifica¬ 
tion of a very large number of unreasonable rates now confessedly in existence on the 
New York, New Haven & Hartford system, the continuation of which naturally cre¬ 
ates uncertainty as to the rates which it would establish in the event of complete 
control. 

Finally, because we believe the acquirement of the 109,948 shares of the capital 
stock of the Boston & Maine Railroad by the New York, New Haven & Hartford Rail¬ 
road, as well as the acquirement of various trolley lines by that corporation, was in 
clear defiance of the well-understood spirit, if not indeed of the exact letter, of Massa¬ 
chusetts law, and that such evident disregard of well-defined public sentiment should 
not be tolerated. 

Resolved , In view of the foregoing, that a committee of five be appointed to appear 
before the proper committee of the Massachusetts Legislature and make known to it 
as strongly as possible the opposition of the Boston Chamber of Commerce to the con¬ 
templated control, and its opinion that the New York, New Haven & Hartford Rail¬ 
road should not be permitted to retain the Boston & Maine Railroad stock which it 
now holds, and to take such further action in opposition as it may deem wise. 

While this was going on the Brockton Board of Trade held another 
meeting. They passed the following resolutions: 

The Brockton Board of Trade at its meeting Monday evening, April 13, adopted 
the following resolutions, which are respectfully submitted for your consideration: 
Whereas since the acquisition by the New York, New Haven & Hartford Railroad of 
control of the Old Colony Railroad there have been numerous advances in freight 
charges by direct advances in rates and changes in classification; and 
Whereas the Massachusetts Legislature is now considering the possibility of permitting 
control of the Boston & Maine Railroad by said New York, New Haven & Hartford 
Railroad Co.; and 

Whereas the recognized policy of the latter company has been to obtain control of all 
rail and water competing transportation routes, at whatever cost necessary; and 
Whereas the average freight rates per ton per mile charged by railroad companies as 
reported to the Massachusetts railroad commission and the Interstate Commerce 
Commission, respectively, in 1907 were as follows, namely: 

Cents. 

New York, New Haven & Hart¬ 
ford R. R. 1. 44 

Boston & Maine R. R. 1. 08 

Boston & Albany R. R.88 

New York Central & Hudson 
River R. R.GO 

And 

Whereas it is particularly vital to the welfare of every citizen of Massachusetts that 
legislation be enacted to prevent further absolute domination of transportation by 
a single corporation operating under laws repugnant to our Commonwealth: 
Resolved, That in the opinion of the Brockton Board of Trade the provisions of 
chapter 585 of.acts of 1907, relative to the stock of the Boston & Maine Railroad, stock 
now held by the New York, New Haven & Hartford Railroad Co., should be extended 
for another year to afford opportunity for more thorough discussion of the subject by 
the citizens of this Commonwealth, and to register their conclusions by referendum 
vote at the next State election; 

Resolved, That the committee on transportation of this board are authorized and 
requested to appear in its behalf at any meetings of legislative committees, or other¬ 
wise, in support of these resolutions; 

Resol red, That copies of these resolutions be sent to Gov. Guild, the president of the 
senate, the speaker of the house, and the chairmen of the senate and house commit¬ 
tees on railroads, respectively. 

Elroy S. Thompson, 
Secretary Brockton Board of Trade. 

Then we found our newspapers blocked with great advertisements 
like the one that I have here. This sheet I show you now has the 
railroad advertisement on one side and on the other side what the 


Cents. 


Average in New England. 1. 19 

Average in United States.748 

Average in Middle States.65 










X. Y., X. H. A HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 51 


people who are opposed to the merger had to say about it. This will 
show you. what we were up against. The paid advertisement said: 

To unite the New Haven with the Boston & Maine would not be a departure from 
the established policy of the Commonwealth, but a fulfillment of it. 

Mr. Chief Justice Nolan, of the supreme judicial court, in delivering 
judgment on February 28, 1908, said: 

We have adopted, in this State, legislative regulation and control as our reliance 
against the evil effects of monopoly, rather than competitive action between two or 
more corporations. 

As a matter of fact, what the chief justice said was this: 

In reference to some kinds of service and under some conditions, it is thought by 
many that regulation by the State is better than competition. 

He was referring to some kinds* of public service. These companies 
are carrying on to-day an advertising campaign which will cost them 
more than a half million of dollars. 

In the paid advertisement they proceed as follows: 

The Massachusetts railroad commission, then consisting of John E. Sanford, Everett 
A. Stevens, and William T. Dale, jr., said in 1893: 

' ‘ Announcement that an agreement has been reached for the union or joint operation 
of two or more roads is, with rare exceptions, no longer received with grave apprehen¬ 
sion of loss or prejudice to the inteterst of the public, but rather with the expectation 
of larger facilities for freight and passenger traffic, better stations and equipment , more 
stable and liberal rates, greater ability and higher standards of management, and a 
generally improved railroad service.” 

What the railroad commission really said was this, that it was in 
1883 they made their statement. There were then eight railroads in 
Massachusetts independently operated. This commission never 
dreamed of a monopoly of steam railroads in Massachusetts. It 
never dreamed of a monopoly of all transportation. The statement 
on the other side is entirely misleading. Then in their paid adver¬ 
tisement the New Haven road says: 

The Boston & Maine is a monopoly. So is the New Haven. To promote commer¬ 
cial competition a completer transportation monopoly is necessary. 

At present the trunk lines play southern against northern New England and are not 
obliged to compete among themselves for New England freight. Competition in New 
England for the short haul to the Hudson and the small fraction of the through rate 
makes monopoly possible on the long trunk line haul and for the larger fraction of the 
through rate. Competition in New England promotes monopoly beyond the Hudson. 
Monopoly in New England would compel competition beyond the Hudson. 

The cry of monopoly is an appeal to prejudice, not to experience or judgment. 

And on the other side the opponents of the merger said this: 

The last statement is absurd on its face. If the trunk lines combine to oppress New 
England, why should we expect them to compete on New England business? The 
real fact is that the New Haven, through its control of the Merchants & Miners’ Trans¬ 
portation Co., has deprived us of the effective competition south and west which we 
had by way of Baltimore and Norfolk. The New Haven is endeavoring now to deprive 
us (perhaps in the interest of the trunk line) of the remaining competition which we now 
enjoy over the Grand Trunk and Canadian Pacific. 

So I could go on at length. I have brought down only a few. I 
can present to this committee a petition signed by more than 25,000 
people of the Common wealth, protesting against this thing. In 
Marlsborough there was not a single man with a store who did not 
sign his name promptly to the petition and the United States suit was 
being vigorously pressed, and the legislature said “Thank heaven, we 
can go home, because the United States Government is taking care of 


52 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

New England.” While that suit was pending they put in a bill to 
give them back one principal college. They appeal to the flag, of 
the United States, and the monopoly forces through a bill which 
gave them back one of the colleges, while the United States has 
drafted this bill against them. They got back their control with 
that suit pending. Then we went home. That was in 1908, when 
this Boston & Maine business was clear in the minds of the public, 
while the United States Government was doing the duty to bring in a 
bill which would legalize the illegal holdings of the Boston & Maine 
stock, and that bill went through the Massachusetts senate, with 
little or no debate, and when it reached the floor of the house the 
same Mr. Walker who received the previous letter that I have referred 
to advocated legalizing the illegal holdings of the Boston & Maine 
securities. We went home with no legislation, and we were hanging 
on the hopes and in the belief that the United States Government 
would eventually press this suit. 

Mr. Hardwick. Did that bill go through? 

Mr. White. No, sir. It was killed. I helped to kill it. 

Mr. Chairman, in the year 1909 the legislature of Massachusetts 
was absolute^ asleep to the possibility of legalizing the Boston & 
Maine holding. They had no more conception that the United States 
suit was begun than they had that the sky would fall. Then Gov. 
Draper came in and said give us a holding device and give it to us 
speedily. I remember I rushed into Gov. Draper’s office and I said 
to him 11 What is this ? ” He said , 11 White, I am a business governor.” 
The Boston & Maine stock that they have taken control of down in 
Connecticut where they have created a holding device is in the hands 
of a man named Billard, who was rated at several million. The stock 
of this system was secreted in another State, and the governor said, 
give us a holding device, and he said to me personally, “I have talked 
with Mr. Mellen several times on this proposal and he says that if we 
will give him a holding device he will bring the stock into Massachu¬ 
setts and that Massachusetts may legislate upon it.” I said, “You 
are a Republican, governor, and I am a Republican.” I said, “If 
you do that kind of thing which has been done in this country, the 
Republicans will fail and you will never be reelected.” He said, “I 
am a business governor.” I said, “What restrictions are there to 
this company?” He said, “Mr. Mellen will not bring back the stock 
into Massachusetts unless when we create this holding device we give 
him permission to buy all the rest of this stock, bonds, and debts of 
the entire Boston & Maine business.” That holding device went 
through the legislature, and nothing under heaven could stop it, with 
that public sentiment against it, with the unanimous decision of the 
boards of trade against it. They forced through this railroad holding 
device, and one of the arguments was that if the railroad holding 
device was created in Massachusetts the United States suit would be 
stopped by the forthcoming administration, and 12 days after 
the passage of that device President Taft instructed Attorney General 
Wickersham to stop the suit, and the suit was dropped and Massa¬ 
chusetts to-day stands helpless. That is why I am here to ask you 
Members of ( ongress to-day to see that this suit shall proceed in 
orderly fashion, or find out the facts and give us a remedy against 
this monopoly on land and sea. 


K. Y v 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 53 


The Chairman. Give us the dates. 

Mr. White. It was in the year 1909 that this holding device was 
created. The dismissal of the suit was about 10 days after. This is 
all taken from Mr. La Follette’s speech. 

Massachusetts was aghast. These humble organizations, such as 
boards of trade, were left in the hands of a complete monopoly. 

^ Now, this Boston & Maine road runs through New Hampshire into 
\ermont and into Maine. There has since been established a traffic 
arrangement which is very close fitting with the Boston & Albany 
road. The new road goes south, and if you will look on the map, you 
will see that we have scarcely anything left in New England except 
a few trolleys in the eastern part which have not been taken by this 
monopoly. 

Going to the high seas, you will find practically from Portland to 
New York and all intermediate points that the steamships parallel 
the rail lines along the seaboard. 

The Chairman. And these steamship lines are owned by the 
railroads ? 

Mr. White. Practically all of them, directly or indirectly. The 
line from New York to Bridgeport, from New Haven to New York, 
from New London to New York, the Joy line, the Fall River line, and 
the line from Boston to New York, which was the Metropolitan Line, 
are practically owned by the New Haven road. We have practically 
a complete monopoly on land and sea, and the wheels of justice down 
here have stopped. 

I want to read to you a letter from the President of the United 
States to me on this subject, and my reply, but first I would like to 
submit a statement made by a member of the holding company. I 
will read it: 

STATEMENT BY MR. FREDERIC C. DUMAINE BEFORE THE JOINT RAILROAD AND TRANSIT 
COMMISSIONS OCTOBER 26, 1909. 

Mr. Dumaine. Mr. Chairman and gentlemen, I appear here as the representative 
of the Boston Railroad Holding Co., to protest against the Boston & Eastern Electric 
Railroad Co.’s petition to tunnel Boston Harbor to connect with the north shore. 
The holding company, as you know, was created by last year’s legislature for the 
purpose of controlling the railroad situation within the bounds of Massachusetts, and, 
incidentally, of New England, I imagine. The holding company has proceeded in 
an orderly way to secure a majority of the stock of the Boston & Maine Railroad, and 
while it has not as yet secured an absolute majority, it has secured a working majority 
and has already elected a board of directors, although the new management has not 
as yet taken its seat. 

It is the intention of the holding company to see to it that every point served by 
the Boston & Maine is adequately served, and we therefore pray you, gentlemen, that 
until we have demonstrated our inability or our unwillingness to give such service, 
you withhold the granting of this petition. To grant it would only add a complica¬ 
tion to an already complicated situation. That is all I have to say, and I thank you 
very much for allowing me an opportunity. 

I have here an opinion of a former attorney general of Massachu¬ 
setts, delivered in 1905, and I will put it in here. 


54 N. Y. f N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The paper referred to is as follows: 

[The New Haven was buying trolleys indiscriminately, against the law. The Boston 
& Maine did not, although it wanted to. Hence the trolley controversy.] 

House No. 1211. 

Commonwealth of Massachusetts, 

Office of the Attorney General, 

Boston, April 28, 1905. 

To the honorable Louis A. Frothingham, 

Speaker of the House of Representatives. 

Sir: I have the honor to acknowledge the receipt of an order of the honorable house 
of representatives requesting the opinion of the attorney general upon certain ques¬ 
tions set forth therein. A copy of said order so transmitted to me is as follows: 

“ Ordered, That the attorney general be requested to transmit to the house of repre¬ 
sentatives his opinion in writing in answer to the following questions: 

“1. Wherein differ the rights, privileges, and duties of the Boston & Maine Railroad 
Co. and the New York, New Haven & Hartford Railroad Co. in the matter of the pur¬ 
chase of the stocks or bonds of street-railway corporations? 

“2. Your honorable predecessor, in an opinion transmitted to the senate and house 
of representatives March 16, 1894, relating to the New York, New Haven & Hartford 
Railroad Co. said: ‘Acting with full knowledge of and acquiescence in the fact that the 
railroad company it incorporated had already received a similar charter from Connect¬ 
icut, the Legislature of Massachusetts must be presumed to have conceded, by impli¬ 
cation, the right to the consolidated corporation to have and exercise such powers gs 
the State of Connecticut, acting upon matters within its exclusive jurisdiction, should 
grant to it by virtue of its sovereignty, and to reserve to itself the right to exercise 
exclusive control over the corporation only as to such matters as should be within its 
exclusive jurisdiction.’ Do you concur with these views, and in that case do you 
or do you not think that the direct or indirect acquisition of all or part of the stock of a 
Massachusetts street-railway corporation by the New York, New Haven. & Hartford 
Railroad Co. falls within the jurisdiction of Massachusetts to an extent sufficient to 
make it illegal in view of the following provision of law? R. L., ch. Ill, sec. 77: 
‘No railroad corporation, unless authorized by the general court or the provisions of the 
following five sections, shall directly or indirectly subscribe for, take, or hold the stock 
or bonds of or guarantee the bonds or dividends of any other corporation, ’ etc. If 
such acquisition is in your opinion illegal, what is the penalty and how may it be 
enforced? 

“3. R. L., ch. Ill, sec. 72, says: ‘If a railroad corporation which owns a railroad in 
this Commonwealth and is consolidated with a corporation in another State which 
owns a railroad therein increases its capital stock or the capital stock of such consoli¬ 
dated corporation, except as authorized by this chapter, without authority of the 
general court, or without such authority extends its line of road, or consolidates with 
any other corporation, or makes a stock dividend, the charter and franchise of such 
corporation shall be subject to forfeiture.’ Your honorable predecessor, in the opinion 
before quoted, commenting on this provision, said: ‘The law amounts to nothing more 
than a declaration of the policy of the State, and it does not pretend to prohibit, much 
less to make unlawful, the acts of a consolidated corporation done in another State, and 
under the lawful authority of the legislature of that State.’ Assuming this to be the 
case as far as relates to acts of the New York, New Haven & Hartford Railroad Co. 
done in Connecticut under the lawful authority of the legislature of that State, what 
would be the bearing of the law on acts done in either Connecticut or Massachusetts 
for the purpose of acquiring control of a Massachusetts corporation, such, for instance, 
as an increase of capital stock to accomplish that purpose directly or indirectly? 

“4. R. L., ch. 126, sec. 11, says in part: ‘If a foreign corporation which owns or 
controls a majority of the capital stock of a domestic street-railway corporation issues 
stock, bonds, or other evidences of indebtedness based upon or secured by the prop¬ 
erty, franchise, or stock of such domestic corporation, unless such issue is authorized 
by the law of this Commonwealth, the supreme judicial court shall have jurisdiction « 
in equity in its discretion to dissolve such domestic corporation. If it appears to 
the attorney general that such issue has been made, he shall institute proceedings 
for such dissolution and for the proper disposition of the assets of such corporation/ 

It is currently reported that the Consolidated Railway Co. of Connecticut, a foreign 
corporation, owns or controls a majority of the capital stock of one or more Massa¬ 
chusetts street-railway companies. If such majority of the capital stock were held 
by Massachusetts trustees for the benefit of a foreign corporation, would that be tan- 


N. Y. f N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 55 


tamount to the ‘control’ meant by the law? Does the section establish clearly that 
it is the policy of Massachusetts not to permit such control unless it is authorized 
by law? 

“Assuming such to be the policy of the Commonwealth, what, if any, change should 
be made in this section to carry that policy into full effect? ” 

The first inquiry is presented in the following form: “Wherein differ the rights, 
privileges, and duties of the Boston & Maine Railroad Co. and the New York, New 
Haven & Hartford Railroad Co. in the matter of the purchase of the stock or bonds 
of street-railway corporations? ” 

Addressing myself to the precise inquiry presented, and without assuming to 
modify it by my own interpretation of its intent, I must hold it to be an inquiry so 
broad in its scope as to involve an attempt on my part to define all the privileges 
and duties of the two corporations referred to in the matter of the purchase of the 
stock or bonds of street-railway companies wheresoever and in or under whatsoever 
jurisdiction the inquiry or condition might arise. To enter upon such determina¬ 
tion would be to transcend the scope and limitations of my official investigation or 
review, since I could not assume to pass upon either question except upon condi¬ 
tions assumed to be affected by the operation of the laws of this Commonwealth, 
which plainly must be limited by their territorial jurisdiction. I can not presume 
to limit the inquiry within the bounds above suggested, and must therefore hold 
that the inquiry as presented lies beyond the field of my determination. I adopt 
this conclusion the more readily since a consideration of the further inquiries sub¬ 
mitted to me may permit of mv responding to the requirements of the honorable 
house of representatives in as full a measure as may be within its contemplation. 

In the second inquiry it is stated that my predecessor, Attorney General Knowl- 
ton, in an opinion transmitted to the senate and house of representatives March 16, 
1894, relating to the New York, New Haven & Hartford Railroad Co., said: 

“Acting with full knowledge and acquiescence in the fact that the railroad com¬ 
pany it incorporated had already received a similar charter from Connecticut, the 
Legislature of Massachusetts must be presumed to have conceded, by implication, 
the right to the consolidated corporation to have and exercise such powers as the 
State of Connecticut, acting upon matters within its exclusive jurisdiction, should 
grant to it by virtue of its sovereignty, and to reserve to itself the right to exercise 
exclusive control over the corporation only as to such matters as should be. within 
its exclusive jurisdiction. 4 * 

To the inquiry, “Do you concur with these views?” I have the honor to reply 
that I am in full concurrence with the views of my predecessor above cited. 

The inquiry continues: “Assuming such concurrence of opinion, do you or do you 
not think that the direct or indirect acquisition of all or part of the stock of a Mas¬ 
sachusetts street-railway corporation by the New York, New Haven & Hartford 
Railroad Co. falls within the jurisdiction of Massachusetts to an extent sufficient to 
make it illegal in view of the following provisions of law? R. L., ch. Ill, sec. 77: 

“ ‘ No railroad corporation, unless authorized by the general court or by the provi¬ 
sions of the following five sections, shall directly or indirectly subscribe for, take, or 
hold the stock or bonds of or guarantee the bonds or dividends of any other corpora¬ 
tion; and the amount of the bonds of one or more other corporations subscribed for and 
held by a railroad corporation, or guaranteed by it conformably to special authority 
of the general court or the authority given in said sections, with the amount of its 
own bonds issued in conformity with sections 63 and 64, shall not exceed at any time 
the amount of its capital stock actually paid in cash.’ ” 

[After suit the Massachusetts Supreme Court sustained this opinion.] 

This inquiry seeks my opinion whether the acquisition of stock upon the hypothesis 
above stated is illegal. 1 am of opinion that it is illegal in that it comes within the 
effective range of the Massachusetts statute which you cite, since it is not a matter 
within the exclusive jurisdiction of the State of Connecticut to authorize the purchase 
of stock of a Massachusetts street-railway corporation. If I am right in this conclusion, 
the attorney general of this Commonwealth may, by appropriate process, invoke 
the action of the courts looking either to the nullification or restraint of the pro¬ 
hibited transaction or to the forfeiture of the charter of the offending corporation in so 
far as the same exists by grant of the Commonwealth of Massachusetts. 

In the third inquiry, Revised Laws, chapter 111, section 62, is cited: 

“If a railroad corporation which owns a railroad in this Commonwealth and is con¬ 
solidated with a corporation in another State which owns a railroad therein increases 
its capital stock or the capital stock of such consolidated corporation, except as au¬ 
thorized by this chapter, without authority of the general court, or without such 
authority extends its line or road, or consolidates with any other corporation, or makes 
a stock dividend, the charter and franchise of such corporation shall be subject to 
forfeiture.” 


56 1ST. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


And a portion of the opinion of my predecessor, Attorney General Knowlton, is 
quoted as follows: 

“The law amounts to nothing more than a declaration of the policy of the State, and 
it does not pretend to prohibit, much less to make unlawful, the acts of a consolidated 
corporation done in another State, and under the lawful authority of the legislature 
of that State, * * * ” 

I understand that the statement of facts presented in the order assumes that the 
opinion last quoted is applicable to acts of the New York, New Haven & Hartford 
Railroad Co. done in Connecticut under the lawful authority of the legislature of that 
State; and the inquiry is made, “What would be the bearing of the law or acts done in 
either Connecticut or Massachusetts for the purpose of acquiring control of a Massa¬ 
chusetts corporation, such, for instance, as an increase of capital stock to accomplish 
that purpose directly or indirectly?” 

I am of opinion that if such act under inquiry were done in the State of Connecticut 
by the corporation and by authority of the law of that State, but with the actual pur¬ 
pose of acquiring stock of a Massachusetts corporation in violation of the law of Massa¬ 
chusetts applicable to such transaction, the charter and franchise of the corporation, 
in so far as they existed by grant of the Legislature of Massachusetts, would thereby 
be made “subject to forfeiture.” A fortiori would this conclusion be inevitable if 
the assumed act with the assumed purpose were done within the State of Massachu¬ 
setts. 

[The New Haven knew these opinions when they acquired the Boston & Maine 
stock.] 

In the fourth inquiry, Revised Laws, chapter 126, section 11, is cited: 

“If a foreign corporation which owns or controls a majority of the capital stock of a 
domestic street-railway, gaslight, or electric light corporation issues stock, bonds, or 
other evidences of indebtedness, based upon or secured by the property, franchise, 
or stock of kuch domestic corporation, unless such issue is authorized by the law of 
this Commonwealth, the supreme judicial court shall have jurisdiction in equity 
in its discretion to dissolve such domestic corporation. If it appears to the attorney 
general that such issue has been made, he shall institute proceedings for such dissolu¬ 
tion and for the proper disposition of the assets of such corporation. The provisions 
of this section shall not affect the right of foreign corporations, their officers or agents, 
to issue stock and bonds in fulfillment of contracts existing on the 14th day of July in 
the year 1894.” 

And it is.added: “It is currently reported that the Consolidated Railway Co. of 
Connecticut, a foreign corporation, owns or controls a majority of the capital stock 
of one or more Massachusetts street-railway companies.” 

I assume that it is intended that I shall accept, for the purpose of rendering my 
opinion, such statement of current report as establishing an existent fact. The 
inquiry then proceeds: “If such majority of the capital stock were held by Massa¬ 
chusetts trustees for the .benefit of a foreign corporation, would that be tantamount 
to the control meant by the law?” 

Confining my answer exactly to such assumed predicates, the accuracy of which I 
do not attempt to determine, I have the honor to advise the honorable house of 
representatives that in my opinion such a state of facts would disclose the control 
intended by the phrase of the statute quoted. 

I am further required to answer the specific question, “Does the section last cited 
establish clearly that it is the policy of Massachusetts not to permit such control unless 
it is authorized by law? ” I entertain grave doubt whether it lies within my province 
to assume to state what the policy of Massachusetts is or may be upon any question 
which properly lies within the responsible discretion and declaration of the legislative 
branch of the government. I may, however, say without presumption that the 
policy, which appears to me to be reflected by existent legislation, declares that such 
control is not to be permitted unless authorized by law. 

A further inquiry is propounded based upon an assumption as follows: “Assuming 
such to be the policy of the Commonwealth, what, if any, change should be made 
in this section to carry that policy into full effect?” If I correctly apprehend the 
tenor and intent of existing legislation, its policy is manifest, though its phrase is 
somewhat ambiguous; and if I may be permitted to proceed upon this assumption of 
my own, I think there does appear to be occasion for further legislation in this regard. 
In order to fully answer this inquiry and to render every assistance that any opinion 
of mine might contribute, I perhaps ought to add that it may be difficult if not im¬ 
possible to attain the apparent end contemplated by the section of the statute last 
quoted, through a dissolution of the domestic corporation whose stock has been 
acquired in violation of the law, because of the difficulty in determining the precise 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 57 

import of the term ‘‘ based upon ” in the section cited, or the proof of a condition falling 
within its express intent, and legislation removing such doubt or construction or 
difficulty in proof may be advisable. 

I have the honor to be, 

Respectfully, Herbert Parker, Attorney General. 

I have another opinion of the attorney general of Massachusetts in 
1903 warning the New Haven not to buy, but the warning was not 
considered. 

Mr. Hardwick. Is not your State law sufficient to deal with that 
situation ? 

Mr. White. We thought it was, only when they get rid of a thing 
they put it in a superior device. 

Mr. BucKLANp. The Boston Railroad Holding Co. is another com¬ 
pany, and turns over to the State of Massachusetts their holdings. 

Mr. White. I am speaking about something else. 

Mr. Buckland. Tell the whole truth. 

Mr. Foster. I suggest the gentleman ought to keep still. 

Mr. Buckland. I do not like to have an impression go forth like 
that. 

Mr. Foster. The gentleman has a right to query you. 

The Chairman. If you desire to enter into a colloquy, you must 
get the permission of the Chair. 

Mr. Murray. The interstate questions have not been touched upon. 
What the gentleman representing the New Haven road says about 
the Boston Railroad Holding Co. here is true, so far as Massachusetts 
is concerned, and I suggest that they ought to bring out the interstate 
features on the problem all because that is the side which the com¬ 
mittee is interested in. 

Mr. White. I want to thank Mr. Murray for the suggestion. I 
have a copy of the suit of the United States v. the New Haven Rail¬ 
road Co., but I do not want to read that long suit now because I do 
not want to take the committee’s time. I will leave this with the 
committee. 

The paper referred to is as follows: 

House No. 1681. 

Commonwealth of Massachusetts. 

Decision of the supreme judicial court of Massachusetts in the case of the Attorney General 

v. Neiv York, New Haven & Hartford Railroad Co., recently decided (p. 1) and the 

petition of the United States of America, complainant, v . New York, New Haven & 

Hartford Railroad Co. and others (p. 21), filed in the United States circuit court. 

Knowlton, (’. J.: 

In the St. 1906, c. 463, Part II, s. 57, is the following provision: “A railroad cor¬ 
poration, unless authorized by the general court or by the provisions of the following 
five sections, shall not directly or indirectly subscribe for, take, or hold the stock or 
bonds of or guarantee the bonds or dividends of any other corporation.” This is a 
reenactment of a statute that has been in force since 1874. Then follows a limitation 
upon the amount of bonds that may be subscribed for and held or guaranteed under 
the authority above referred to. The following five sections authorize the holding 
of stock in a telegraph company whose lines connect two or more places on the railroad, 
the guarantying of bonds of a corporation incorporated in Massachusetts for the pur¬ 
pose 0 of carrying freight, passengers, and mails between any port of this Common¬ 
wealth and Europe, the taking of stock in any elevator corporation organized for the 
purpose of erecting and operating a grain elevator within this Commonwealth, the 
guarantying of bonds of connecting railroads and aiding in the construction of any 
branch or connecting railroad within the limits of the Commonwealth, and, for that 
purpose, the taking of stock in such a corporation. 


58 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

The provision above quoted is an affirmative statement of the doctrine of ultra 
vires, in reference to the stock or bonds of other corporations. It carries this prohibi¬ 
tion into a field which otherwise in individual cases and under peculiar conditions 
possibly might seem to be open for occupation by a railroad corporation for the pro¬ 
motion, incidentally, of its corporate interests. It is intended to relieve corporations 
and others from any doubt as to proposed investments in the stock or bonds of other 
corporations, and as to the financial support of other corporations by guarantying their 
bonds or dividends. 

By excepting action under the five following sections it recognizes a policy of the 
Commonwealth to promote, under general laws, the investing in stock or the guar¬ 
antying of bonds in certain corporations whose business is closely connected with that 
of the railroad corporation or incidental to it, and also the like investing or guar¬ 
antying for the purpose of aiding a connecting railroad, either already constructed or 
about to be constructed. Besides the general law permitting investing in aid of con¬ 
necting railroads under these limitations, the exception recognizes the power of the 
general court, by further legislation, to authorize the holding of stock or bonds of 
other corporations, as such holding has often been authorized by special legislation 
in Massachusetts and in other States. 

The attorney general alleges that the defendant has violated this provision. It 
therefore becomes necessary to consider the statute more particularly, as well as the 
defendant’s relations to it, and the conduct of the defendant referred to in the informa¬ 
tion. The statute refers to railroad corporations established under the authority of 
this Commonwealth and amenable to its laws. It does not include foreign corpora¬ 
tions. The defendant corporation was established under an act of the Legislature 
of Massachusetts, and it succeeds to rights and liabilities, or has directly obtained 
rights and assumed liabilities under numerous legislative acts of Massachusetts. It 
was also organized under a law of Connecticut, where most of its property is. Many 
laws affecting it have been enacted in Connecticut, and it contends that, under the 
authority of these laws it could legally do all that the attorney general complains of. 

The first question to be considered is whether by reason of the peculiarities of its 
organization as a corporation owning and operating a railroad extending into different 
States and deriving power and authority from the legislation of different States it is 
relieved from the prohibition of the statute. If, without considering other provisions 
of the charter from Massachusetts or of the charter from Connecticut, we look first at 
the facts that there was a consolidation of two corporations into a single corporation 
which was the creature of both States, operating a railroad extending into both, having 
the same capital stock to cover the property in both States, and electing its officers 
and managing its business as a single corporation, there is nothing that makes it any 
more a domestic corporation in one of the States than in the other. It is a foreign 
corporation in neither of them. It is a domestic corporation in each of them. It is a 
single corporation in most of its features. In other features it i£ two corporations 
acting together as one. It is a single corporation with two parents who live apart and 
act independently, each having absolute control in his own domain. It owes allegi¬ 
ance and is subject alike to each, and is dependent upon each alike for future favors. 
We are speaking now of a legislative consolidation or merger of two corporations, 
upon equal terms, which this was, and not of mere permission to a corporation of one 
State to enter another State and acquire property or franchises there. 

The statutes relating to corporations owning lines of railroad running across the boun¬ 
daries of States differ considerably in their provisions. The acts under which the 
defendant corporation assumed its present name were the St. 1872, c. 171, and Con¬ 
necticut public acts, 1871, c. 129. These provided for a consolidation of the Hartford 
<fc New Haven Railroad Co. with the New York & New Haven Railroad Co. The 
New York & New Haven Railroad Co. was incorporated in 1844. (Private Laws of 
Connecticut, Vol. IV, p. 1020.) The Hartford & New Haven Railroad Co. was itself 
incorporated, in its later form, under the authority of St. 1844, c. 28, and the resolve 
of Connecticut passed in 1845 (Private Laws of Connecticut, Vol. IV, p. 967), whereby 
the Hartford & Springfield Railroad Co. of Massachusetts and the Hartford & New 
Haven Railroad Co. were united under the name of the New Haven, Hartford & 
Springfield Railroad Co. (See also Private Laws of Connecticut, Vol. IV, p. 900.) 
By the St. 1847, c. 244, the name of the corporation to be formed by the union was 
changed to the Hartford & New Haven Railroad Co., which was the name of a pre¬ 
viously existing corporation owning a railroad extending from Hartford to New Haven, 
incorporated in 1833. (Private Laws of Connecticut, Vol. I, p. 1002.) There were 
several acts of the General Assembly of Connecticut in regard to the Hartford & Spring- 
field Railroad Co. of Connecticut, covering the years from 1835 to 1842, but this cor¬ 
poration was never organized. The extension of the Hartford & New Haven Rail¬ 
road Co. and its union with the Hartford & Springfield Railroad Co. were under the 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 59 

resolve of 1845, already referred to. The acts relative to the Hartford & Springfield 
Railroad Co. of Connecticut, may be found in the private laws of Connecticut, Vol. I, 
p. 1006; \ ol. IV, pp. 917-979, and in the Connecticut private acts, 1838, p. 47. These 
acts all provide for a union with a Massachusetts corporation for the construction and 
operation of a railroad between Hartford and Springfield. 

The Hartford <fc Springfield Railroad Co., which was consolidated with the Hart¬ 
ford New Haven Railroad Co. under the St. 1844, c. 28, was incorporated under St. 
1839, c. 101, with the additional and amendatory acts, Sts. 1844, c. 24; 1845, c 42 
and 1847, c. 244. 

Section 7 of the St. 1872, c. 171, under which the New York, New Haven & Hartford 
Railroad Co. was organized, is as follows: “Said consolidated corporation shall, at 
all times, be subject to the legislature of this State, as to that portion of its road in 
this State, as heretofore, and shall be subject to the general laws of this State as to its 
whole road so far as such laws may be applicable thereto.” 

In section 5 is this clause: “ Provided , however , That when a special duty or liability 
is imposed, or any special franchise, privilege, or immunity is conferred on the cor¬ 
poration so merged by its charter, such duty or liability shall attach to and be dis¬ 
charged by, and such franchise, immunity, or privilege be enjoyed by such con¬ 
solidated corporation, so far as the same is applicable to the road and franchise of 
said merged corporation.” The St. 1852, c. 87, is an act authorizing the Hartford & 
New r Haven Railroad Co. to increase its capital stock, and in reference to the authority 
of the corporation it contains this language: “Also to make any lawful contract and 
merge or make joint stock with any other railroad company owning a branch of said 
railroad or connecting line without the limits of Massachusetts in the same manner and 
to the same extent as may be authorized by the General Assembly of the State of 
Connecticut. And said company shall be subject to all the general laws of this Com¬ 
monwealth to the same extent as if their railroad were wholly therein. Provided , 
however , That nothing in this act shall be interpreted to confer the power to purchase, 
merge, or make joint stock with the railroad of the New Haven & Northampton Co., 
known as the Canal Railroad.” By the St. 1868, c. 355, that portion of the last act 
which gives authority “to make any lawful contract and merge or make joint stock 
with any other railroad company without the limits of this Commonwealth,” w r as 
repealed, but the provision making the company subject to all the general laws of this 
Commonwealth has not been changed. 

Section 6 of the St. 1844, c. 28, under which the union of the Hartford & Springfield 
Railroad Co. with the Hartford & New Haven Railroad Co. was formed, is as follows: 
“ Said corporation, so far as their road is situated in Massachusetts, shall be subject to 
the general laws of this State to the same extent as if their road were wholly therein.” 
Section 3 declares that after the said corporations become united in one corporation 
by an assenting vote of the stockholders “all the tolls, franchises, rights, powders, privi¬ 
leges, and property granted or to be granted, acquired or to be acquired, under the 
authority of the State of Connecticut or of this State shall be held and enjoyed by all 
the said stockholders in proportion to their number of shares in either or both of said 
corporations.” 

The defendant relies strongly upon this last language, and contends that under 
it the State of Connecticut could give the corporation franchises and powers to be exer¬ 
cised in Massachusetts which other corporations in Massachusetts are not permitted 
to exercise. We have already suggested that, apart from some such provision, when a 
corporation is made tip of two consolidated corporations holding charters from different 
States in the way show n by the statutes referred to the new corporation is to be treated 
as a domestic corporation in each State in reference to the laws of that State relating 
to its conduct there. The relations of such corporations to the State, under different 
statutory provisions, have been considered in many cases, most of which relate to 
the citizenship of the corporation in reference to jurisdiction in the Federal courts. 
(Nashua Railroad v. Lowell Railroad, 136 U. S., and cases cited; Goodwdn v. New 
York, New r Haven & Hartford Railroad Co., 124 Fed. Rep., 358.) In the first of these 
cases Mr. Justice Field said, speaking for the court: “By the general law r , railroad 
corporations created by two or more States, though joint in their interests, in the oper¬ 
ation of their roads, in the issue of their stock, and in the division of then- profits so 
as practically to be a single corporation, do not lose their identity, and each one has its 
existence and its standing in the courts of the country only by virtue of the legislation 
of the State by which it is created. The union of name, of officers, of business, and of 
property does not change their distinctive character as separate corporations.” In 
the latter of these two cases Judge Lowell considered the subject at length in a w r ell 
reasoned opinion, with a review of the authorities. In Muller v. Davis, 94 U. S., 
444-447, the court said of a similar consolidation: “The tw T o companies became one, 
but in the State of Iow>a that one was an Iowa corporation existing under the law T s of 


60 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

that State. The laws of Missouri had no operation in Iowa.” The attorney general 
of Massachusetts, in an able opinion to the legislature, given in 1894, said of this 
defendant corporation: “It grants and acquires property as one corporation. It has 
no machinery by which it can act in a difal capacity. So far as respects its charter 
it is two corporations. As to its property, contracts, and business it is one and indi¬ 
visible. In short, to quote the words of the Ohio court above cited (Covington Bridge 
Co. v. Mayer, 31 Ohio St., 317), it is, in fact, ‘one corporation with the powers of two 
corporations.’ ” (I Opinions of Attorney General, 118-134.) He might have added, 
“with the liabilities of each of two corporations under the laws of the States, respec¬ 
tively, from which they received their charters.” The principle was applied in 
Kingsbury v. Chapin (196 Mass., 82 N. E. Rep., 700), where the court said: “In a 
sense such a railroad corporation is a domestic corporation in each of the States where 
it is incorporated and owns and operates a railroad. We think that stock in such a 
corporation is ‘property within the jurisdiction of the Commonwealth’ under the 
language of our statute authorizing taxation of collateral inheritance. (R. L., c. 15, 
s. 1*. St. 1905, c. 470. St. 1906, c. 436.) We think it is property within the jurisdic¬ 
tion of the Commonwealth in a constitutional sense, such as to enable the State to 
subject it to taxation as against a nonresident owner. ’’ But it was held that in making 
the assessment the stock should be valued on the basis of representing only that portion 
of the property of the company which was situated within the Commonwealth. See 
also Moody v. Shaw, 173 Mass., 375-378, in which it was said that “Whenever either 
State has an interest in distinguishing between the two franchises it has a right to 
do so.” (See also Railway Company v. Wbitton’s Administrator, 13 Wall., 270; 
Pennsylvania Railroad Co., v. St. Louis, etc., Railroad Co., 118 U. S., 290; Memphis 
Railroad Co. v. Alabama, 107 U. S., 581; Goodwin v. New York, New Haven & Hart¬ 
ford Railroad Co., 124 Fed. Rep., 358.) 

Each of the statuses of Massachusetts under which the defendant claims its franchises 
was subject to alteration, modification, or repeal, the St. 1872, c. 171, by the express 
provision contained in section 7 and the others by virtue of our general law on that 
subject, which has been in force since 1831. (R. L., c. 109, s. 3.) 

How far, by reason of the peculiar nature of the corporation or by the force of express 
provisions in the statutes, has Massachusetts given up its right of control of this cor¬ 
poration or relieved it of the application of our general laws, and how far has it retained 
such control? As creating a corporation to build and operate a railroad in two different 
States, and by the language quoted from the St. 1844, c. 28, s. 2, the legislature recog¬ 
nized the fact that the corporation might have certain franchises, rights, powers, 
privileges, and property granted or acquired under the laws of only one of the two 
States. As to such rights and powers as pertain only to local matters, like the location 
of the railroad, the possession and management of real estate, the crossing of highways 
and other railroads, the State in which they were to be exercised would have exclusive 
jurisdiction. This fact is enough to show the reason for using the language relied on 
by the defendant. In regard to all such matters the action of only one State would 
be appropriate and sufficient. How far this implied authority to grant powers and 
franchises without the cooperation of the sister State should be held to extend it is 
unnecessary in this case to decide. Whether it should go so far as to include the 
acquisition of other railroads within the State where the power is granted, or the loca¬ 
tion and construction of new lines and extensions there, and an increase of the capital 
stock for such purposes, is a question upon which it is not necessary to express an 
opinion. 

Powers and franchises of a general character, whose effect upon the corporation 
would not be merely local, but would work changes in its relations to private persons 
and to the public authority in both States alike, stand differently. It is not easy 
to maintain that under these statutes there is implied authority to the corporation to 
receive such powers from either State alone and hold them in such a way that they 
will have full effect in both States. If any such general powers can be so granted 
and held without legislative action in both States it seems plain that they are only 
such as are not in conflict with the laws or the declared public policy of the State which 
does not grant them. Massachusetts can not grant this corporation franchises to be 
enjoyed and exercised in Connecticut which are contrary to the laws of Connecticut; 
for the corporation in each State is a domestic corporation, and as such it is governed 
by the laws of the State of its creation in all that it does within that State. We think 
it plain that, in the different provisions of the statutes of Massachusetts to which 
we have referred the legislature intended to retain control of the consolidated cor¬ 
poration as a domestic corporation in everything that it might do within this Com¬ 
monwealth, and that, in recognizing its right to receive franchises and acquire 
property in Connecticut, it did not give it an implied right to receive any franchise in 
Connecticut to be enjoyed or exercised in Massachusetts in violation of the laws or 
public policy of this Commonwalth. 


N. Y v X. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 61 


If we look more particularly at the language in section 6 of St. 1844, c. 28, relied on 
by the defendant, we see that its real purpose was not to give to either State greater 
power over the interstate corporation that the State would have without it. Its object 
was to declare that the corporation created by the merger of the Connecticut corpora¬ 
tion and the Massachusetts corporation should have but one capital stock, and that all 
the stockholders, in proportion to the number of their shares, should own the stock 
and all rights of property in common. 

Apart from this, the ownership of stock in street railways in Massachusetts is the 
exercise of a right under a Massachusetts franchise. This language was not intended 
to give to Connecticut authority to grant to the corporation a right to do in Massachu¬ 
setts that which can be done only under a Massachusetts franchise. 

It tollows that, in reference to subscribing for, taking, or holding stock or bonds of 
corporations in Massachusetts, or guaranteeing the bonds or dividends of such cor¬ 
porations, the defendant is restrained by the statute, like other railroad corporations 
organized under the laws of this State. ‘ * 

Upon the question whether the defendant corporation has directly or indirectly 
subscribed for, taken, and held the stock and bonds, and has guaranteed the bonds and 
dividends, and is now directly or indirectly holding the stock and bonds and guar¬ 
anteeing the bonds and dividends of certain domestic corporations, as alleged in the 
information, the master made a summary of facts found by him as follows: 

“1. The directors of the New York, New Haven & Hartford Railroad Co. voted 
and took action upon the question of acquiring such street railways, and for that pur¬ 
pose acquired the stock and control of the Worcester & Connecticut Eastern Railway 
Co., which afterwards became the Consolidated Railway Co., which acquired addi¬ 
tional pow r ers from the General Assembly of Connecticut and did acquire the stocks, 
bonds, and securities of the street railways named in the information, excepting of 
the Springfield Street Railway Co. 

“2. The directors of the defendant. corporation, holding the entire stock of the 
Consolidated Railway Co., elected its directors and corporate officers, and the directors 
and officers so elected were substantially the same persons who were the corporate 
officers and directors of the New York, New Haven & Hartford Potilroad Co. 

“3. The Consolidated Railway Co. acquired all the stock of the Worcester & South- 
bridge Street Railway Co., the Worcester & Blackstone Valley Street Railway Co., 
the Webster & Dudley Street Railway Co., the Worcester & Webster Street Railway 
Co., and a majority of the capital stock of the Berkshire Street Railway Co. As holder 
of such stock it controlled the election of the directors and corporate officers of these 
street railway companies, and such directors and officers were substantially the same 
persons who were directors and officers of both the Consolidated Railway Co. and of 
the New York, New Haven & Hartford Railroad Co. 

“4. The Consolidated Railway Co. did not directly acquire a majority of the stock 
of the Springfield Street Railway Co., but it passed votes, acted and entered into 
agreements for the organization of the Springfield Railway Cos., and made an agree¬ 
ment with that association, guaranteeing certain dividends on its preferred stock and 
guaranteeing a certain price upon the preferred stock in a certain event, and the Spring- 
field Railway Cos. did acquire a majority of the stock and securities of the Springfield 
Street Railway Co. 

‘-‘5. The officers and trustees of the Springfield Railway Cos. are also persons who 
are directors and corporate officers of both the New York, New Haven & Hartford 
Railroad Co. and of the Consolidated Railway Co. 

“6. The .Springfield Railway Cos., by its holding of stock of the Springfield Street 
Railway Co., elects its directors and corporate officers, a majority of whom are directors 
and officers of the New York, New Haven & Hartford Railroad Co. and of the Con¬ 
solidated Railway Co. 

“7. The Consolidated Railway Co. has continued to hold the entire capital stock 
of the Worcester & Webster Street Railway Co. and of the Webster & Dudley Street 
Railway Co. 

“8. Upon June 25, 1906, the voluntary association known as the New England 
Investment & Security Co. was formed, and the Consolidated Railway Co. sold and 
conveyed to it all of the stocks, bonds, and securities which it held in the Worcester 
& Southbridge Street Railway Co., the Worcester & Blackstone Valley Street Railway 
Co., the Berkshire Street Railway Co., and the Springfield Street Railway Co. (102 
shares'). 

“9. The plan of organization of the New England Investment & Security Co. was 
reported to and approved by the directors of the New York, New Haven & Hartford 
Railroad Co., and an agreement as to the guaranty of its stock was made between the 
New York, New Haven & Hartford Railroad Co., the Consolidated Co., and the New 
England Investment & Security Co., and the Consolidated Railway Co. was a party 
to the agreement and declaration of trust. 


62 X. Y., X. H. & HARTFORD AXD GRAXD TRUXK R. R. AGREEMEXT. 

“10. Most of the trustees and officers of the New England Investment & Security 
Co. are persons who are directors and officers of the New York, New Haven & Hart¬ 
ford Railroad Co. and of the Consolidated Railway Co.” 

It is important to determine what is meant by the words, “shall not directly or 
indirectly subscribe for, take, or hold the stock or bonds,” etc. Doubtless one pur¬ 
pose of the provision was to protect minority stockholders froip the risk of detrimental 
acts of a corporation ultra vires. But a more important purpose was to prevent a 
railroad corporation from obtaining, without legislative permission, the control of 
another corporation so situated that competition between the two might conserve the 
the insterests of the public. While combinations of connecting railroads have been 
encouraged by many enactments, our laws are intended to prevent the consolidation 
of railroad corporations which are natural competitors for the same business, except 
when authority therefor is obtained from the legislature. The words “subscribe for, 
take, or hold ” are intended,to include legal ownership of every kind. The word 
“indirectly” covers other modes of holding than by taking or holding the legal title. 
The words together cover every kind of proprietary interest in the stock or bonds re¬ 
ferred to. It is immaterial how or where the legal title is held directly, if indirectly 
the railroad corporation is the equitable or beneficial owner of it. What the legislature 
was seeking to prevent was influence in the management of the subordinate corpora¬ 
tion by the other corporation, however exercised, and whether extending to absolute 
control or falling short of it. With this in view, language was used in the statute to 
include every kind of beneficial ownership, however indirectly held. 

The master’s summary of facts and the other findings that appear in the report show 
how completely the defendant controls the street railways in question. The capital 
stock of all of them but the Springfield Street Railway Co. was bought and held by 
the Consolidated Railway Co., all of which stock is held by the defendant, and 
all of whose directors are the defendant’s directors. If we assume that this corpora¬ 
tion was legally organized and is legally maintained, so as to have a separate corporate 
existence, it is in realty a piece of legal machinery owned and operated by the defend¬ 
ant. Through this the defendant acquires and owns and uses property with as com¬ 
plete control as it has over its locomotive engines. If it does this indirectly, it does 
it as effectively as if the ownership were direct. Through the direct purchase and 
ownership of the street railway corporations, by its creature, the Consolidated Railway 
Co., the defendant transgressed the law as to all the street railway companies mentioned 
in the information, except the Springfield Street Railway Co., and is still transgressing 
in the same way as to the Worcester & Webster Railway Co. and the Webster & Dudley 
Street Railway Co., whose ownership is retained in the same form. Some of these 
street railway companies have been dealt with directly by the defendant, at different 
times, by votes of its directors while acting in that capacity. The defendant’s presi¬ 
dent is the president of the Consolidated Railway Co. and of all these street railway 
companies, and he receives no compensation for the performance of these ’official 
duties, except his salary as president of the defendant corporation. 

The stock of the Springfield Street Railway Co. was acquired through action of the 
Consolidated Railway Co., whose directors voted that it “should be acquired by this 
company, and that the plan for payment of the same outlined by the president be 
approved, namely, the establishment of a trust covering the issue of $3,000,000 guar¬ 
anteed trust certificates, and the sum of $1,500,000 of 4 per cent debentures of this 
company.” PIere was the origin of the Springfield Railway Cos., which was estab¬ 
lished by the Consolidated Railway Co. as a part of a scheme for holding and control- 
ing the stock of the Springfield Street Railway Co. This is a voluntary association, 
consisting of a board of trustees, of whom all but one are directors of the Consolidated 
Railway Co. and of the defendant corporation, who are designated as trustees in the 
declaration of trust, together with the members of the firm of Lee, Higginson & Co., 
of Boston, bankers, who are called subscribers. Under the instrument the trustees 
assume no personal financial liability and have no beneficial ownership, although they 
are the holders of the legal title to all the property belonging to the association and are 
the managers of it. Lee, Higginson & Co. are parties for the purpose of disposing of 
preferred shares to be issued by the association, and managing other matters of finance. 
As a part of the arrangement the Consolidated Railway Co. entered into a contract 
with Lee, Higginson & Co. which, after the formal part, began with a recital as follows: 
“Whereas the Consolidated Railway Co. desires to acquire the whole, or at least a 
majority, of the capital stock of the Springfield Street Railway Co., and desires Lee, 
Higginson & Co. to offer the stockholders of said company $225 in cash per share or 
$75 in cash per share and $150 in preferred stock of the Springfield Railway Cos. issued 
under a declaration of trust dated March 15, 1905,” etc. 

It was then agreed that the Consolidated Rail wav Co. should sell its 4 per cent 50- 
year debentures to the amount of $1,500,000 and Lee, Higginson & Co. should buy 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 63 

not exceeding that amount of these debentures at a price named, and should under¬ 
write not exceeding $2,937,600 in amount of the preferred shares of the Springfield 
Railway Cos. at $100 per share. Then followed this recital, “which sale of bonds, 
with cash to be paid by the Consolidated Railway Co., and underwriting, will fur¬ 
nish the funds necessary for the purchase of said street railway stock at the price 
agreed upon,” etc. It was then agreed that the Consolidated Railway Co. should 
forthwith issue, sell, and deliver to Lee, Higginson & Co. the debentures, and that 
there should be “formed a holding trust to be called the Springfield Railway Cos. 
* * * to acquire and hold at least a majority of the capital stock of the Springfield 
Street Railway Co., which said trust shall issue at this time not exceeding $2,937,600 
of preferred shares, which shall be entitled to cumulative dividends at the rate of 4 
per cent per annum, payable,” etc. * * * “and in case of liquidation, payment 
of the property of said preferred shares at the rate of $105 per share to be guaranteed 
by the Consolidated Railway Co., and to be subject to call on any dividend date at 
the rate of $105 per share, as provided in the agreement of said Consolidated Railway 
Co. with the Springfield Railway Cos.,” etc. 

There was a provision that Lee, Higginson & Co. should underwrite at par so many 
of the preferred shares as should be necessary to acquire the whole, or at least a major¬ 
ity, of the stock of the Springfield Street Railway Co. at the price stated. There was 
then a provision for an underwriting commission to be given to Lee, Higginson & Co. 
in full payment for their services. The expenses of forming the trust and of carrying 
out the terms of the agreement were to be paid by the Consolidated Railway Co. 
Under this arrangement the stock of the Springfield Street Railway Co. was acquired 
and turned over to the association, which consisted of the trustees, with no financial 
interest, and the Consolidated Railway Co., which was then the beneficial owner of 
all the property. The common shares in the Springfield Railway Cos. to the amount 
of $5,000,000 were to be delivered to the Consolidated Railway Co. as soon as a ma¬ 
jority of the stock of the Springfield Street Railway Co. should be acquired. The 
proceeds of all the preferred shares were to be accounted for to the Consolidated 
Railway Co. by Lee, Higginson & Co. The trust, including the accompanying con¬ 
tracts, was simply a machine constructed for the management of the property and 
the business in the interest of the Consolidated Railway Co., which was the interest 
of the defendant corporation. As to sales made by Lee, Higginson & Co. to third 
persons, and as to the underwriting of Lee, Higginson & Co., if that be deemed a pur¬ 
chase by them of the preferred shares, the Consolidated Railway Co. is still indirectly 
the owner of the shares, or at least of an interest in them. 

The Springfield Railway Cos. is not a corporation, although the parties, by their 
contract, soii&ht to obtain many of the advantages of a corporation without its liabili¬ 
ties. (See Hussey v. Arnold, 182 Mass., 203.) All who have any proprietary interest 
in it have rights of property as individual owners, subject to such restraints upon the 
management and use of it as are .legally imposed by the contracts under which it is 
held. They are equitable tenants in common. By the terms of the agreement the 
association must be wound up and liquidated at the end of 20 years and 11 months. 
If there are profits from the enterprise the Consolidated Railway Co. will be entitled 
to the whole of them. It held all the common shares, although it has since turned 
them over to the New England Investment & Security Co. The other holders of the 
preferred shares can receive only $105 per share as principal, with interest at 4 per 
cent. Any proceeds beyond that amuunt will go to the Consolidated Railway Co. 
If there is not enough in the property to pay that, the Consolidated Railway Co. must 
make up the deficiency, for it guaranteed this amount to all of the preferred shares 
on liquidation. It can at any time wind uplthe association, for by its contract it has 
retained a right to call and redeem all the preferred shares on any dividend date at 

$105 per share. . , , ,, , , 

The case is like that of an association that issues mortgage bonds to be redeemed 
at $105 at maturity, with a right to call and redeem .them at any earlier time at the 
same rate. In such a case the bondholders have merely made a loan. The real 
beneficial owners of the property are those who have agreed to pay the loan whereby 
the property will be redeemed. The transfer of certificates to purchasers of pre¬ 
ferred shares is in the nature of a pledge. It seems plain that the Consolidated Rail¬ 
way Co. is indirectly a holder and owner of everything belonging to the Springfield 
Railway Cos., subject to its relations to the New England Investment & Security 
Co to which we shall refer hereafter. As the defendant owns all the stock of the 
Consolidated Railway Co., it is indirectly the holder and owner of the 19,253 preferred 
shares of the Springfield Street Railway Co. in the hands of the trustees of the Spring- 
field Railway Cos., as well as of the right to redeem the preferred shares m the hands 
of the purchasers. 


64 N. Y.. N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The New England Investment & Security Co. is a voluntary association similar to 
the Springfield Railway Cos., although in terms it is of broader scope as to the property 
that may be owned and the business that may be transacted. The declaration of 
trust by which it was created was signed by seven of the directors of the Consolidated 
Railway Co. and of the defendant corporation, who were designated as the trustees, 
and by the Consolidated Railway Co., and by a number of the firm of Mackay & Co., 
bankers, who contracted to sell the preferred shares, and by an assistant of the presi¬ 
dent of the numerous corporations and the associations, who are designated together 
as subscribers. The trustees have no financial interest and are under no financial 
liability in regard to the property or business, but they hold the legal title and act 
as managers, under the name of the New England Investment & Security. Co. They 
issued preferred shares and common shares which represent the ownership in the prop¬ 
erty and business of the association. The preferred shares are guaranteed by the 
Consolidated Railway Co., principal and interest, as the shares of the Springfield 
Railway Cos. are, and are subject to call in the same wav, and are to be redeemed at 
$105 per share when called, or when the affairs of the association are liquidated. This 
guaranty was made at the request of the defendant corporation, which in turn guaran¬ 
tied the Consolidated Railway Co. against loss from its guaranty. 

The Consolidated Railway Co. sold to the New England Investment & Security 
Co. all the stocks and bonds which it held of the Worcester & Southbridge Street 
Railway Co., the Worcester & Blackstone Valley Street Railway Co., the Worcester 
Railway <fe Investment Co., the Springfield Street Railway Co. and the Springfield 
Railway Cos., for the sum of $10,000,000, which was paid by the promissory note of the 
New England Investment & Security Co., and it guarantied the preferred shares of 
this company to the amount of $10,000,000, at the request of the defendant corpora¬ 
tion. The contract under which the shares were issued and the guaranty was made, 
was signed only by the New England Investment & Security Co., the Consolidated 
Railway Co. and the New York,, New Haven & Hartford Railroad Co. In the last 
analysis, in view of the ownership of one corporation by the other, the only party that 
had any interest in the matters covered by the contract was the defendant corporation. 
There was a contract with Mackay & Co. for the sale of these shares, but they were all 
held by Mackay & Co. for the benefit of the Consolidated Railway Co. At the time 
of the hearing there were 66,137 preferred shares held by Mackay & Co. and owned 
by the railway company. So far as relates to the questions with which we are now 
concerned, there is no substantial difference between the two voluntary associations. 
In each the equitable ownership is in the Consolidated Railway Co. which is entitled 
ultimately to the profits from the management, if there are profits, on liquidation, 
and which must make good the loss to the preferred shareholders if there is a deficiency. 

From the findings and evidence in the very voluminous report of the master, and 
notably from the testimony of Mr. Mellen, the president of the voluntary associations 
and the corporations, and of Harmer, the secretary and comptroller of the New Eng¬ 
land Investment & Security Co., it is plain that all the street railway companies 
mentioned in the information are indirectly held and controlled and managed in the 
interest of the defendant as absolutely and completely as it holds and manages its 
line of railroad between Springfield and New York. The allegations of the attorney 
general in this particular are fully sustained by the evidence. 

The attorney general contends that the defendant is directly or indirectly guaranty¬ 
ing the bonds and dividends of these corporations. It is indirectly guarantying the 
dividends on the preferred shares of the two associations—of the first association 
through the Consolidated Railway Co. which it owns and controls, and of the second 
association in the same way, with an additional express guaranty to the Consolidated 
Railway Co. for its protection from loss by its guaranty. These shares represent the 
ownership of the stock of these street railways. The guaranty is not of the dividends 
to be declared on the stock of the street railway corporations themselves, but only of 
the dividends to be declared on the shares of the holding company, issued to represent 
the stock in the corporations. Whether this should be deemed an indirect guaranty 
of the dividends of the corporations, we do not deem it necessary at this time to de¬ 
termine, for.it seems that if the defendant ceases to hold directly or indirectly any 
proprietary interest in the stock of the street railway corporations, this will involve 
a termination of its relations as guarantor of these dividends. 

The defendant’s counsel has referred in his argument to returns of different railroad 
companies to the railroad commissioners at different times, showing a holding of stocks 
or bonds of other corporations. These were not in evidence, and the circumstances 
of the corporate action and the reasons for it do not appear. It, is fair to assume, as the 
defendant’s counsel did assume in his argument, that these holdings were for the most 
part, if not altogether, under the authority of law. They show nothing more than that 
it has been a part of the policy of the Commonwealth to permit close relations between 
connecting railroads. Even if it should appear that some corporation had openly 


N. Y., X. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 65 


acted ultra vires without prosecution by the officers of the Commonwealth, it would 
not affect the construction of this statute or the right of the Commonwealth to enforce 
it. Action of a corporation ultra vires, where no great harm is done, often goes without 
rebuke. 

The returns of the defendant are referred to, which show the holding of stocks in 
railroad companies in other States, and lately, of certain railroad companies in this 
Commonwealth. We may assume that most, if not all of these, were stocks of con¬ 
necting railroads, or were held under authority of special legislation in this State. 
Whether any of these holdings were in violation of the public policy of Massachusetts 
does not distinctly appear. Nothing is shown like the facts in the present case. 

There was no- unreasonable delay on the part of the public authorities in directing 
the attention of the defendant to the statute as soon as its conduct in Massachusetts 
in reference to these corporations became publicly known. The defense of laches 
can not prevail. 

Directly or indirectly subscribing for, taking and holding or guarantying the bonds 
and dividends of another corporation in this Commonwealth, by a railroad corporation 
organized under our laws, is the exercise of that which would be a franchise if authority 
to do it had been granted by the legislature. It is within the provision of the St. 
1906, c. 372, and may be restrained by injunction under this statute. (Attorney 
General v. New York, New Haven & Hartford Railroad Co., 197 Mass.; 83 N. E. 
Rep. 408.) 

Decree for the informant. 

In the Circuit Court of the United States for the District of Massachusetts. 

The Un ited States of America, complainant , v. The Neiv York, New Haven & Hartford 

Railroad Co., Boston & Maine Railroad, The Consolidated Railway Co., and The Provi¬ 
dence Securities Co., defendants. In Equity, No. —. 

PETITION. 

To the honorable the judges of the Circuit Court of the United States of America for the 

District of Massachusetts, sitting in equity: 

Your petitioner, the United States of America, by Asa P. French, its attorney for 
the District of Massachusetts, acting under the direction of its attorney general, 
brings this its petition against the New York, New Haven & Hartford Railroad Co., 
a corporation created and existing under the laws of Connecticut, of Massachusetts, 
and of Rhode Island, and having its principal office at New Haven, in the State of 
Connecticut; the Boston <k Maine Railroad, a corporation created and existing under 
the laws of Maine, of New Hampshire, and of Massachusetts, and having its principal 
office at Boston, in the last-named State; the Consolidated Railway Co., a corporation 
created and existing under the laws of Connecticut, and having its principal office at 
New Haven, in that State; and the Providence Securities Co., a corporation created 
and existing under the laws of Connecticut, and having its principal office at New 
Haven, in that State. 

And, on information and belief, your petitioner complains and says: 

I. 

That the defendants, the New York, New Haven & Hartford Railroad Co., herein¬ 
after called the New Haven Co., and the Boston & Maine Railroad were, at the times 
hereinafter mentioned, and now are, common carriers engaged in interstate trans¬ 
portation of freight and passengers by steam railroad: that the defendant, the Con¬ 
solidated Railway Co., was, at the times hereinafter mentioned, a common carrier 
engaged in interstate transportation of freight and passengers by electric railway; 
that the defendant, the Providence Securities Co., is a holding corporation, holding 
all the capital stock of the Rhode Island Co., a corporation operating electric rail¬ 
ways engaged in interstate transportation of freight and passengers. 

n. 

HISTORY OF GROWTH AND CONSOLIDATION OF STEAM RAILROADS IN NEW ENGLAND. 

That in the year 1872, when the New Efaven Co. was organized, there existed a 
large number of independent steam railroads in the various New England States, 
some of which operated wholly within a single State, while others were interstate 
carriers; that since that year a number of steam railroad corporations have come into 

72177—13-5 


66 N. Y. y N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


existence in those States, some of which operated wholly as intrastate while others 
operated as interstate carriers; that between the years 1872 and 1904 a consolidation of 
these various independent steam railroad companies gradually took place, so that by 
the close of the latter year the control of the steam railroads in those States of New 
England in which the defendant railroad companies operate, and between those States 
and the rest of the United States, had become vested substantially in the following 
companies, to wit: The New York, New Haven & Hartford Railroad Co., the Boston 
& Maine Railroad, and the Boston & Albany Railroad; that each of these three 
companies, up to and including the year 1904, had, in the main, chosen its natural 
field for expansion. The New Haven Co. confined its acquisitions and extensions 
largely to lines operating in the States of Connecticut, Rhode Island, and southern 
and southeastern Massachusetts, a territory hereinafter termed “Southern New 
England;” the Boston & Maine Railroad confined its acquisitions and extensions 
largely to lines operating in the States of Maine, New Hampshire, Vermont, and 
northern and western Massachusetts; and the Boston & Albany Railroad to a more 
or less otherwise unoccupied field, principally in central Massachusetts, extending 
from Boston westward through that State into the State of New York. The miles of 
railroad operated in 1903 by these three companies were, approximately: 


Miles. 

The New Haven Co. 2, 037.12 

Boston & Maine Railroad. 2, 342. 94 

Boston & Albany Railroad. 304. 09 


That so far as the States of Maine, New Hampshire, Massachusetts, Rhode Island, 
and Connecticut are concerned, these three railroad systems were, at the times here¬ 
inafter mentioned, and now are, practically the only means of transportation by 
steam railroad between and among these States, and between these States and the 
rest of the United States. 

III. 

HISTORY OF THE GROWTH OF ELECTRIC URBAN AND INTERURBAN RAILWAY LINES IN 

SOUTHERN NEW ENGLAND. 

That beginning with the early nineties, electricity began to be applied as a motive 
power to urban and interurban railways and, owing to the proximity to each other 
of the numerous cities and towns of Massachusetts, Rhode Islarid, and Connecticut, 
projecting companies found a fertile field in these States; that the result was that, 
prior to the year 1904, a large number of such railway companies had come into 
existence, and electric urban and interurban lines overran these States, so that, 
practically all the cities and towns in them had become connected by this means of 
transportation; that in the building of these lines the various independent compa¬ 
nies so constructed them that when taken all together they formed a complete system 
by means of which it became, was, and is possible to travel on such electric urban 
and interurban lines from New York City to Boston, and to almost any other place 
or places in Massachusetts, Rhode Island, and Connecticut, changing cars, of course, 
at many intersecting and connecting places; that these lines to a great extent paral¬ 
leled the New Haven Co.’s lines and served substantially the same territory, as more 
clearly appears from the map hereto attached, marked, “Exhibit B,” and hereby 
made a part of this bill of complaint. 

IV. 

COMPETITIVE NATURE OF THE NEW HAVEN CO. AND THE BOSTON & MAINE RAILROAD. 

That the New Haven Co. and the Boston & Maine Railroad at and prior to the 
doing of the acts hereinafter complained of, owned or controlled and operated two 
separate, independent lines of steam railroad, as stated in Paragraph II hereof, each 
company, for the most part, operating in a distinct field, the main line of the one 
extending from New York x to Boston, and that of the other from Boston to Portland, 
Me.; that notwithstanding such fact each of said companies had branch lines running 
east and west through the State of Massachusetts into New York, touching and serving 
in common a large number of flourishing cities and towns in Massachusetts, among 
others Boston, Lowell, Fitchburg, Marlboro, Worcester, Springfield, Holyoke, North¬ 
hampton, Clinton, Concord Junction, Shelburne Falls, South Sudbury, Turners 
Falls, Sterling Junction, Deerfield, South Deerfield, Easthampton, Leominster, 
Berlin, Chelmsford, Acton, North Acton, and Bolton, and that each of said companies 
actively competed with each other for the trade and commerce carried on between 
said State of Massachusetts and the territory adjacent thereto and points west of the 





N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 67 


Hudson River, where each road makes its through connections, thus furnishing tho 
public with two naturally competing lines for carrying on trade and commerce among 
the several States of the United States; that at the times hereinafter mentioned these 
two railroad systems were, with the exception of the Boston & Albany Railroad, sub¬ 
stantially the only lines of steam railroad connecting southern New England (in which 
are located Boston and other large and thriving manufacturing cities, the centers of 
the prosperity of this territory) with the rest of the United States, and said li nes were 
then engaged in active competition with one another for freight and passenger business 
among the several States of the United States. 

V. 


COMPETITIVE NATURE OF THE NEW HAVEN CO. AND THE ELECTRIC URBAN AND 

INTERURBAN RAILWAY LINES. . 

That the New Haven Co. and the electric urban and interurban railway systems of 
Massachusetts, Rhode Island, and Connecticut, and a portion of New York, at and prior 
to the doing of the acts hereinafter complained of, operated separate, independent 
parallel lines for the transportation of persons and property between and among the 
States of Massachusetts, Rhode Island, Connecticut, and New York; that while, at 
stated in Paragraph VI hereof, competition by steam railroad with the New Haven Co. 
in this territory had been effectually stifled prior to the year 1904, yet the application of 
electricity to street railways and the rapid expansion of such railways in this territory 
furnished a new means of competition, excited the alarm of the New Haven Co., and 
called from it and its managing officers repeated declarations as to the competitive 
nature of this new transportation service; that as early as 1893 Charles P. Clark, 
president of the New Haven Co., in his annual report to the stockholders for that 
year said: 

“The rapid application of electricity as a motive power upon the highways naturally 
brings the attention of railroad managers to the competition thereby created with 
existing steam roads.” 

And again, in his report for 1894, he reiterated the feeling then existing in the follow¬ 
ing language: 

“The construction of electric railroads in the neighborhood of our property continues 
throughout all its territory. Wherever they seriously reduce the revenue of this 
property we shall be compelled to lessen local service in a corresponding degree, as 
pointed out in our last annual report.” 

That thus, while competition in transportation by steam railroad between the States 
of Massachusetts, Rhode Island, Connecticut, and a portion of New York no longer 
existed by the year 1904, the public, through this new transportation service, had been 
furnished with two parallel and competing lines for the transportation of passengers and 
freight between and among the States of Massachusetts, Rhode Island, Connecticut, 
and New York. 

VI. 

HISTORY OF THE NEW HAVEN CO. UP TO THE YEAR 1904. 

That the defendant, the New Haven Co., was organized in 1872 by the consolidation 
of the New York & New Haven Railroad with the Hartford & New Haven Railroad; 
that by virtue of this consolidation the New Haven Co., upon its organization, operated 
an interstate railroad, the main line of which extended from Williams Bridge in New 
York, through Connecticut, to Springfield in Massachusetts, its lines, main and branch, 
aggregating at this time only 190.75 miles in length; that by the year 1904, by reason 
of its various acquisitions, the main line of the New Haven Co. reached from New York 
City to Boston, and its branch lines completely overran the States of Connecticut and 
Rhode Island and a considerable part of Massachusetts, principally the southern and 
southeastern portions of that State; that it embraced all the miles of steam railroad in 
these States, except 58 in Connecticut, owned by the New London Northern Railroad 
Co. and the South Manchester Railroad Co.; 25 in Rhode Island, owned partly by the 
Newport & Wickford Railroad & Steamboat Co., partly by the Narragansett Pier Rail¬ 
road Co., and partly by the Mashassuck Valley Railroad Co.; and those in Massachu¬ 
setts owned by the Boston & Maine Railroad, the Boston & Albany Railroad, the 
New London Northern Railroad Co., and six short local lines; that the New Haven 
Co., therefore, in or about the year 1904, operated all the miles of steam railroad in the 
territory comprising the States of Massachusetts, Rhode Island, and Connecticut, 
except those in the control of the Boston & Maine Railroad, Boston & Albany Rail¬ 
road, and the various small independent companies referred to above; that it no 


68 N. Y., X. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


longer had any interstate rival by steam railroad between Massachusetts, Rhode 
Island, and Connecticut, and absolutely controlled the transportation by steam rail¬ 
road between southern New England and New York City and the South; that it had, 
in other words, prior to 1904, acquired a practical monopoly of the' steam-railroad 
facilities among and between said New England States and between them and New 
York City and the South, and that this result has been brought about in a large meas¬ 
ure, at least, by the acquisition or control of its former interstate competitors in this 
territory. 

VII. 

THE UNLAWFUL COMBINATION, MONOPOLY, AND ATTEMPT TO MONOPOLIZE. 

That the defendant, the New Haven Co., having, prior to the year 1904, thus ac¬ 
quired practically all the steam-railroad facilities for the transportation of passengers 
and freight between southern and southeastern Massachusetts, Rhode Island, and 
Connecticut, and between those States and New York City and the South, and com¬ 
pletely suppressed all interstate competition in transportation by steam railroad in 
this territory, which had theretofore existed, and having, moreover, obtained control 
of certain electric railways in the States of Connecticut and Massachusetts more 
specifically hereinafter mentioned, did, thereafter, in violation of sections 1 and 2 
of the act of July 2, 1890, entitled, “An act to protect trade and commerce against 
unlawful restraints and monopolies,” knowingly, unlawfully, and wrongfully com¬ 
bine, monopolize, and attempt to monopolize, m the manner hereinafter more spe¬ 
cifically described, certain other steam railroads and electric railways then arid there 
engaged in the transportation of passengers and merchandise among the several States 
of New England and between said States and the several States of the Union, each 
and all of which other steam railroads and electric railways were then and there 
engaged in competing, and some of which were susceptible of being made competitors, 
in the transportation of trade and commerce with the said the New Haven Co.; and 
the said the New Haven Co. did then and there knowingly, unlawfully, and wrong¬ 
fully, in the manner hereinafter more specifically described, suppress, and attempt 
to suppress, all competition between itself and such other steam railroads and electric 
railways, hereinafter more specifically mentioned, in the transportation of passengers 
and merchandise among the several States of New England and between said States 
and the several other States of the Union; and the said the New Haven Co. thereafter, 
in the prosecution of such combination, monopoly, and attempt to monopolize, and 
in order to effect the same, did unite and bring under one common management and 
control substantially all methods of transportation by land between the several States 
of New England and between said States and the several other States of the Union and 
did monopolize and attempt to monopolize such transportation contrary to the act 
of Congress hereinbefore referred to; and your petitioner alleges that the defendant, 
the New Haven Co., thereby, and by virtue of the acts hereinafter set forth, has 
become and is now a combination in restraint of trade or commerce among the several 
States, and has monopolized and attempted to monopolize a part of the trade or 
commerce among the several States contrary to and in violation of said act of Congress 
of July 2, 1890. 

VIII. 

STEPS IN THE SUPPRESSION OF COMPETITION BETWEEN THE NEW HAVEN CO. AND 
THE ELECTRIC URBAN AND INTERURBAN RAILWAY SYSTEMS IN CONNECTICUT. 

That in pursuance of the unlawful combination, monopoly, and attempt to monopo¬ 
lize aforesaid, in July, 1901, the board of directors of the defendant, the New Haven 
Co., voted: 

“That the committee heretofore appointed in relation to the People’s Tramway Co. 
and the Southbridge branch, consisting of the president and Messrs. Taft and Brush, 
is continued to consider and act with full power as to plans for uniting into one sys¬ 
tem operated by a corporation to be controlled by this company lines of electric rail¬ 
way constructed and about to be constructed in the vicinity of the Norwich division, 
and for having the Southbridge branch also operated as an electrical railway by the 
same corporation under a proper lease or operating contract, or approve such acts 
or agreements by officers of this company and by other corporations for the carrying 
out of plans of said nature as said committee may deem beneficial to this company.” 

That in October, 1903, said committee above referred to reported to the board of 
directors of the defendant, the New Haven Co., that— 

“The proposition to acquire an interest in the People’s Tramway Co. was approved 
by Messrs. Robinson, Taft, and the president prior to Mr. Robinson’s death, and 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 69 


thereafter the question of connecting this system with two roads in Massachusetts 
and making a through line from Norwich to Worcester was further considered and 
approved by the committee. These extensions resulted in the formation of the cor¬ 
poration known as the Worcester & Connecticut Eastern Railway, with power to 
build to Norwich, but with a completed line extending from Central Village to Wor¬ 
cester and a spur from Central Village to Moosup, and from Killingly to Chestnut 
Hill, connecting there with the Providence & Danielson Electric Railway, running 
between Providence and Danielson. This company advanced, from time to time, 
under the direction of the committee, certain funds for the construction and extension 
of the lines, and bonds were issued on the various lines so extended and connected, 
with the final result that the money advanced by this company has been repaid to 
it except the sum of $15,000, which the company has invested in the property. In 
return for this investment the company has received and now holds a majority of 
the stock of the Worcester and Connecticut Eastern Road, to wit, 2,501 shares, which 
gives this company control of the property.” 

That the Worcester & Connecticut Eastern Railway Co. was originally incorporated 
in April, 1901, by an act of the Connecticut Legislature as the Thompson Tramway 
Co. for the purpose of transporting “both persons and property as a common carrier 
upon highways and elsewhere in the town of Thompson;” that on January 24, 1902, 
its corporate name was changed by the superior court of New Haven County, Conn., 
to the Worcester & Connecticut Eastern Railway Co., and the rights, properties, and 
franchises then acquired and merged into it through the procuration of the defendant, 
the New Haven Co., were those of the People’s Tramway Co. and the Danielson & 
Norwich Street Railway Co., corporations organized under the laws of Connecticut 
to operate electric railways; that in May, 1903, by an act of the Connecticut Legis¬ 
lature, power was conferred upon the said the Worcester & Connecticut Eastern Rail¬ 
way Co. to “exercise all the rights and franchises of each of said two corporations;” 
that by section 7 of the act incorporating the Danielson & Norwich Street Railway 
Co., power was given to that company to “purchase, hold, and enjoy stock, 
bonds, properties, leases, and franchises of any other corporation;” to “issue its bonds 
and full-paid stock at its par value;” to “merge, consolidate, and make common 
stock with other corporation;” whereby said consolidated company, the Worcester 
& Connecticut Eastern Railway Co.,,thereupon became invested with the powers of 
a holding corporation; that in September, 1902, said company, through leases of the 
Webster & Dudley and the Worcester & Webster Street Railway Cos. corporations 
organized under the laws of Massachusetts and operating electric railways in that 
State, became an interstate trolley system running and operating from Worcester, 
Mass., through Webster, Mass., to Central Village, Conn., a distance of approximately 
40 miles, and paralleling the Norwich division of the defendant railroad, the New 
Haven Co.; that in May, 1904, the defendant, the New Haven Co., acquired the entire 
capital stock of the said the Worcester & Connecticut Eastern Railway Co., and elected 
its officers and directors (who were substantially the same persons who were officers 
and directors of the New Haven Co.), and thereafter controlled absolutely its affairs 
as though the two were one and the same corporation. 

That at a meeting held on May 14, 1904, of the directors of the defendant, the New 
Haven Co., the following resolution was adopted: 

“ Resolved , That the said committee on electrical lines of the standing committee, 
consisting of Directors Brooker, Brush, and Cheney, with the Directors Milner, Bar¬ 
ney, Hall, Bishop, Warner, and Osborne, be appointed special committee, with full 
power to consider and carry into effect the consolidation into one corporation of the 
various electrical lines controlled by this company.” 

That as a result of the action of this committee, and in further pursuance of the 
unlawful combination, monopoly, and attempt to monopolize, charged in Paragraph 
VII hereof, the name of the said the Worcester & Connecticut Eastern Railway Co., 
through the procuration of the defendant—the New Haven Co., which, as aforesaid, 
owned and voted its entire capital stock of 5,000 shares and elected its officers and 
directors—was changed by decree of the superior court of New Haven _ County, 
Conn., on May 18,1904, to the Consolidated Railway Co., and its capital stock increased 
from $500,000 to $10,000,000, being 100,000 shares of $100 each, for the purpose of 
taking over and consolidating into one company the various electrical lines of the 
said defendant, the New Haven Co., theretofore acquired, which said electrical lines 
were thereupon consolidated under the name of the said the Consolidated Railway 
Co. in the manner following and upon the dates, to wit: Shares. 

June 30, 1904. The Consolidated Railway Co. issued and exchanged for the 
entire capital stock of 5,000 shares of the Worcester & Connecticut Eastern 
Railway Co., its predecessor in title, an equal number of its own shares, 
viz. 


5, 000 



70 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


June 30, 1904. The Consolidated Railway Co. issued and exchanged for the Shares, 
capital stock 'of the Fair Haven & Westville Railroad Co. and Winchester 


Avenue Railroad Co., and the Meriden Electric Railroad Co., which the 

New Haven Co. had previously acquired. 92, 000 

ctober 1, 1904. The Consolidated Railway Co. issued and exchanged for 
the capital stock of the Stamford Street Railway Co., which the New 
Haven Co. had previously acquired. 3, 000 


100, 000 

That in the manner aforesaid all of the electrical lines which the defendant, the 
New Haven Co., had acquired prior to May, 1904, were thus acquired, dominated, 
and controlled by one subsidiary holding company, all of whose capital stock the 
New Haven Co. owned and voted, and whose officers and directors it elected (nearly 
all of whom were officers or directors of the New Haven Co.), and whose affairs and 
acquisitions hereinafter set forth and described it controlled and dominated. 

That thereafter, from time to time, and in further pursuance of the unlawful combi¬ 
nation, monopoly, and attempt to monopolize, as charged in paragraph YII hereof, 
the defendant, the New Haven Co., through the instrumentality of this subsidiary 
company, the Consolidated Railway Co., acquired through the issuance of debentures 
of the latter company (the principal and interest of a large part of which it guaranteed) 
the following companies operating electric lines in the State of Connecticut in compe¬ 
tition with the defendant, the New Haven Co., and which were merged with its said 
subsidiary, the Consolidated Railway Co., on the dates following, to wit: 

1904. May 4: The Wallingford Tramway Co. 

1904. September 29: The Norwich Street Railway Co. 

1904. September 29: Montville Street Railway Co. 

1904. October 22: New London Street Railway Co. 

1904. November 28: The Middletown Street Railway Co. 

1905. September 19: Hartford Street Railway Co. 

1905. September 19: The East Hartford & Glastonbury Street Railway Co. 

1905. September 19: The Greenwich Tramway Co. 

1905. September 19: The Branford Lighting & Water Co. 

1905. September 19: The Suffield Street Railway Co. 

1905. December 6: Willimantic Traction Co. 

1906. March 13: The Hartford & Middletown Street Railway Co. 

1906. March 26: The Hartford, Manchester & Rockville Tramway Co. 

1907. April 28: The Waterbury & Pomperaug Valley Street Railway Co. 

1907. June 28: The Torrington & Winchester Street Railway Co. 1 

1907. June 28: The Meriden, Southington & Compounce Tramway Co. 1 

That by virtue of the acquisition of the companies as aforesaid, and of a lease for 999 
years from August 1, 1906, of the Connecticut Railway & Lighting Co., a corporation 
organized under the laws of Connecticut and operating approximately 150 miles of 
electric railway in that State, the defendant, the New Haven Co., had, prior to May 31, 
1907, brought under its ownership and control approximately 500 out of (500 miles of 
electric railway then in operation in the State of Connecticut. 


IX. 

STEPS IN THE SUPPRESSION OF COMPETITION BETWEEN THE NEW HAVEN CO. AND THE 
ELECTRIC URBAN AND INTERURBAN RAILWAY SYSTEM OF MASSACHUSETTS. 

That in further pursuance of the unlawful combination, monopoly, and attempt to 
monopolize, as charged in paragraph VII hereof, the Consolidated Railway Co., acting 
for and in behalf of the defendant, the New Haven Co., between May, 1904, and May, 
1907, through the purchase of a controlling stock interest and otherwise, brought under 
its control the following-named companies operating electric railway lines centering 
about and paralleling the said defendant’s steam railroad in Massachusetts, to wit: The 
Worcester Railways & Investment Co.; the Worcester & Southbridge Street Railway 
Co.; the Worcester & Blackstone Valley Street Railway Co.; Webster & Dudley Street 
Railway Co.; Worcester & Webster Street Railway Co.; the Springfield Street Rail¬ 
way Co.; the Springfield Railway Cos.; the Berkshire Street Railway Co.; Springfield 
& Eastern Street Railway Co.; Central Massachusetts Electric Co.; Milford, Attleboro 
<fc Woonsocket Street Railway Co.; Western Massachusetts Street Railway Co.; Han¬ 
ford & Worcester Street Railway Co. 


1 The formal act of merger of these two companies did not take place until after the merger of the Con¬ 
solidated Railway Co., into the New Haven Co. on May 31,1907. 







N. Y v N. H. & HARTFORD AND GRAND TRUNK R, R. AGREEMENT. 71 


That of the aforesaid companies the Consolidated Railway Co., prior to June 25, 
190(», by the purchase of the entire capital stock of the Worcester & Southbridge Street 
Railway Co., the Worcester & Blackstone Valley Street Railway Co., Webster & Dudley 
Street Railway Co., and Worcester <fc Webster Street Railway Co., and a majority of the 
capital stock of the Berkshire Street Railway Co., the Worcester Railways & Invest¬ 
ment Co., and of the Springfield Street Railway Co., had acquired control over them, 
and elected their officers and directors, who were substantially the same persons who 
were officers or directors of the defendant, the New Haven Co., and of the defendant, the 
Consolidated Railway Co.; that the stock of the Springfield Street Railway Co., namely, 
19,253 shares out of a total capital stock of 19,584 shares, was, with the exception of 102 
shares, which it acquired directly, acquired by the Consolidated Railway Co. through 
the establishment of the Springfield Railway Cos., under an agreement and declaration 
of trust dated March 15, 1905. 

That on or about June 25, 1906, the New Haven Co., because of a widespread feeling 
of hostility on the part of the people of Massachusetts to the ownership of street rail¬ 
ways by steam railroad companies in that State, and for the purpose, as your petitioner 
alleges, of evading a law of Massachusetts (St. 1874, c. 372, sec. 53; reenacted, St. 1906, 
c. 463, Pt. II, sec. 57),which provides, in substance, so far as applicable to the situation 
herein described, that a railroad corporation, unless authorized by the general court, 
shall not directly or indirectly subscribe for, take, or hold the stock of any other cor¬ 
poration, and, in further pursuance of the unlawful combination, monopoly, and 
attempt to monopolize, as charged in paragraph VII hereof, did devise and carry out a 
scheme which resulted in the formation of a voluntary association known as the New 
England Investment <fc Security Co.; that by means of an agreement and declaration of 
trust, dated June 25, 1906, under which said New England Investment & Security Co. 
was organized, said voluntary association thereupon took over, and ever since has held, 
the stocks and securities of the Massachusetts street railway companies 1 (except the 
Worcester & Webster and Webster & Dudley Street Railway Cos.) which the Consoli¬ 
dated Railway Co. had theretofore acquired, as follows, to wit, the Worcester Railways 
& Investment Co., the Worcester & Southbridge Street Railway Co., the Worcester & 
Blackstone Valley Street Railway Co., the Springfield Street Railway Co., the Spring- 
field Railway Cos., and the Berkshire Street Railway Co.; that the New England In¬ 
vestment & Security Co. issued to the Consolidated Railway Co. in payment therefor a 
promissory note in the sum of $10,000,000, with interest thereon at the rate of 4 per cent 
per annum, the Consolidated Railway Co. at the same time indorsing, at the request 
of the New Haven Co., an issue of ten millions par value of preferred stock of the said 
New England Investment & Security Co., and receiving from that company for such 
indorsement, under the terms of the trust agreement, ten millions par value of the 
common shares—the total issue thereof—of the said New England Investment & 
Security Co.; that the trustees of said New England Investment & Security Co., among 
other powers under the said trust agreement, had the power of subscribing for, pur¬ 
chasing, acquiring, and holding shares of the capital stock, shares, or securities of any 
corporation or association owning or operating railroads or railways, and in pursuance 
of such authority, since the date of its formation, to wit, June 25, 1906, said voluntary 
association has acquired a controlling interest in the shares of the capital stock of certain 
of the companies hereinbefore named, to wit, Springfield & Eastern Street Railway 
Co.; Central Massachusetts Electric Co.; Milford, Attleboro & Woonsocket Street Rail¬ 
way Co.; and Hartford & Worcester Street Railway Co.; that by virtue of the ownership 
by the defendant, the Consolidated Railway Co., of all the common stock in said New 
England Investment & Security Co., and the right to direct the recall of the preferred 
^tock in said association at a given price, held and enjoyed by the defendant, the Con¬ 
solidated Railway Co., under the said trust agreement, the defendant, the Consolidated 
Railway Co., controlled said voluntary association, elected its trustees, who were sub¬ 
stantially persons who are officers and directors of the defendant, the Consolidated 
Railway Co., as well as of the defendant, the New Haven Co., and the trustees so 
elected by and in the interest of the defendant, the Consolidated Railway Co., in turn 
elected the officers and directors of the several companies hereinbefore in this para¬ 
graph named, who were substantially the same persons who were officers and directors 
of the defendant, the Consolidated Railway Co., and of the defendant, the New Haven 
Co.; that in this manner the Consolidated Railway Co., prior to May 31, 1907, had 
brought under its control and management the several electric railway companies in 
this paragraph mentioned, so that each and all of such companies were absolutely 
dominated and controlled by the said the Consolidated Railway Co. in the interest 
of the defendant, the New Haven Co. 


1 These two companies were operated under leases authorized by the State of Massachusetts, and their 
stock which the Consolidated Railway Co. had acquired that company continued to hold directly 



72 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


X. 

STEPS IN THE SUPPRESSION OF COMPETITION BETWEEN THE NEW HAVEN CO. AND 
THE ELECTRIC URBAN AND INTERURBAN RAILWAY SYSTEMS OF RHODE ISLAND. 

That in further pursuance of the unlawful combination, monopoly, and attempt to 
monopolize, as charged in Paragraph VII hereof, in or about the month of January, 
1907, the defendant, the New Haven Co., through the agency and instrumentality 
of a holding corporation, acquired control of the principal urban and interurban 
electric railways operating in the State of Rhode Island, which at that time centered 
about and paralleled its steam road, in the manner following, to wit: That on Janu¬ 
ary 11, 1907, the name of the New England Loan & Trust Co., a corporation organized 
under the laws of Connecticut, was changed at the'instigation of the defendant, the 
New Haven Co., by the decree of the superior court for Hartford County, Conn., to 
the name of the Providence Securities Co.; that the charter of this company fixed its 
capital stock at $50,000 (with power in the directors to increase it to $250,000), all of 
which the defendant, the New Haven Co., then owned, and conferred upon it the 
power, among others, “to buy and sell all kinds of securities, * * * to act as 
trustee or as financial or other agent for any * * * corporation, and in their 
behalf to issue registered and countersigned certificates of stock, bonds, and other 
evidences of indebtedness * * that thereupon the defendant, the New 

Haven Co., owning and voting the entire capital stock of the defendant, the Provi¬ 
dence Securities Co., and electing its officers and directors, who were and are sub¬ 
stantially persons who were and are officers or directors of the said the New Haven Co., 
caused it, the said the Providence Securities Co., to issue approximately $20,000,000 
of 4 per cent 50-year debentures, which were guaranteed as to principal and interest 
by the New Haven Co., for the purpose of acquiring and bringing under its ownership 
and control the said urban and interurban electric railway system in the State of 
Rhode Island; that thereupon the defendant, the Providence Securities Co., did 
acquire the stock and other securities of the Rhode Island Securities Co.; that said 
last-named company was incorporated under New Jersey law, in 1902, for the purpose 
of uniting under a single management the street railway, gas, and electric light prop¬ 
erties of Providence, R. I., and vicinity, and prior to the time of its acquisition by 
the Providence Securities Co. the said Rhode Island Securities Co. had acquired, 
through the purchase of a controlling stock interest in the Rhode Island Co.—a corpo¬ 
ration organized June 24, 1902, for the purpose of uniting under a single management 
the street railway, gas, and electric light properties of Providence and vicinity— 
control of the principal urban and interurban electric lines in Rhode Island, to wit: 
Pawtucket Street Railway, Rhode Island Surbuban Railway, and the Union Rail¬ 
road; that these three last-named companies were operated by the Rhode Island Co. 
under 999-year leases; that some time in the past year, to wit, in or about November, 
1907, the intermediary holding company, the Rhode Island Securities Co., was dis¬ 
solved, and the defendant, the Providence Securities Co., since said dissolution has 
been and now is the direct holding company for the stock and other securities of the 
Rhode Island Co.; that in June, 1907, the Rhode Island Co. acquired by purchase, 
or otherwise, control of the Woonsocket Street Railway Co., the Providence & Bur- 
rillville Street Railway Co., and the Columbian Street Railway Co.; that through 
the defendant holding company, to wit, the Providence Securities Co., which controls 
the Rhode Island Co., as aforesaid, the defendant, the New Haven Co., has brought 
under its control and management the principal urban and interurban electric rail¬ 
way companies in Rhode Island. 

XI. 

STEPS IN THE SUPPRESSION OF COMPETITION BETWEEN THE NEW HAVEN CO. AND THE 
ELECTRIC INTERURBAN RAILWAY LINE IN NEW YORK. 

That in further pursuance of the unlawful combination, monopoly, and attempt to 
monopolize, as charged in Paragraph VII hereof, the defendant, the New Haven Co., 
through the defendant, the Consolidated Railway Co., acquired control in July, 1905, 
of the New York & Stamford Railway, through a 999-year lease, which lease was a short 
time thereafter canceled; that prior to the time of the filing of this petition the Con¬ 
solidated Railway Co. has acquired the entire capital stock of $500,000 in the interest 
of the New Haven Co.; that said company, the New York & Stamford Railway, oper¬ 
ates an electric line 9 miles in length, paralleling the steam road of the defendant, 
the New Haven Co., extending from Port Chester, on the New York boundary line, 
to New Rochelle, N. Y., connecting the trolley system of Connecticut, hereinbefore 
described, with trolley lines running into New York City. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 73 


XII. 

RESULT OF THE NEW HAVEN CO/S ACQUISITIONS OF ELECTRIC URBAN AND INTERURBAN 

SYSTEMS AFORESAID. 

That while it is true that most of the various companies acquired by the Consolidated 
Railway Co., the Providence Securities Co., the Rhode Island Co., and the New Eng¬ 
land Investment & Securities Co., in the interest of the defendant, the New Haven 
Co., as set forth and described in Paragraphs VIII, IX, X, and XI, were at the time 
of their acquisition physically intrastate railways, and engaged for the most part in 
the conduct of intrastate transportation, yet they were connected one with another in 
such a manner as to constitute a link in a system approximating 1,500 miles in length, 
extending from New Rochelle, N. Y., through and overrunning the States of Connecti¬ 
cut, Massachusetts, and Rhode Island, and paralleling, in the main, the steam road 
of the New Haven Co., and touching and connecting substantially the same points, 
and serving substantially the same territory, as will more fully appear from the map 
hereto attached as Exhibit B, and hereby made a part of this bill of complaint; that 
said system of electric railways competed with the New Haven Co. for the interstate 
trade or commerce carried on between and among the States of Massachusetts, Rhode 
Island, and Connecticut, and between those States and New York City and the 
South; that by the control over this electric urban and interurban interstate system, 
in the manner hereinbefore set forth and described, the defendant, the New Haven 
Co., has been enabled to and has completely suppressed such competition, and has 
deprived the public of the advantages thereof, and has established a monopoly of the 
instrumentalities of commerce in this territory so thoroughly and completely as to 
practically preclude the possibility of competition being hereafter revived and reestab¬ 
lished except by relief from this honorable court. 

XIII. 

FURTHER STEPS IN THE CONTROL BY THE NEW HAVEN CO. OVER THE GATEWAYS OF 
INTERSTATE COMMERCE IN SOUTHERN NEW ENGLAND. 

That in further pursuance of the unlawful combination, monopoly, and attempt 
to monopolize, as charged in Paragraph VII hereof, the defendant, the Consolidated 
Railway Co., through the procuration of the defendant, the New Haven Co., did, on 
May 25, 1905, secure from the Connecticut Legislature an amendment to the charter 
of the first-named company, by virtue of which, in addition to acquiring the power of 
being a general transportation, lighting, power, water, and holding company, it 
acquired franchise rights so extensive as to authorize it to construct and operate 
electric railways in and connecting virtually every city and town of any consequence 
in the State of Connecticut, to the practical exclusion of any other company, the direct 
effect of which was to vest in the said the Consolidated Railway Co. a substantially 
exclusive privilege to construct and operate electric railways in that State; that the 
effect of such legislation was to vest in said company the control over the gateways 
of interstate commerce between the States of Connecticut and Rhode Island, Con¬ 
necticut and Massachusetts, and Connecticut and New York, and to thereby make 
future competition, as well as existing competition, with said defendant, the New 
Haven Co., in this territory in interstate transportation practically impossible. A 
copy of said -amended charter is hereto attached as Exhibit A and hereby made a 
part hereof. That in the manner hereinbefore described the defendant, the New 
Haven Co., has brought under its ownership and control not only every existing 
means of interstate transportation in this territory and acquired a monopoly thereof, 
but as well, under the charter of the said the Consolidated Railway Co., has acquired 
in the manner aforesaid the power to prevent practically the springing up of any 
competition in such transportation hereafter, and has fastened a complete monopoly 
upon the people of the United States in this territory, to their great damage, in deroga¬ 
tion of their common right and in violation of the act of July 2, 1890, entitled “An 
act to protect trade and commerce against unlawful restraints and monopolies.” 

XIV. 

STEPS IN THE SUPPRESSION OF COMPETITION BETWEEN THE NEW HAVEN CO. AND THE 

BOSTON & MAINE RAILROAD. 

The said the New Haven Co. having, by the means and in the manner aforesaid, 
acquired control over all avenues and instrumentalities for the transportation of per¬ 
sons and freight, both by steam railroads and trolley lines, between and among the 


74 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


States of southern New England and between those States and New York City and 
the South, and having suppressed all competition in such trade or commerce and 
established a virtual monopoly thereof, to the detriment of the people of the United 
States and in violation of the act of Congress aforesaid, the said defendant, the New 
Haven Co., in further pursuance of the unlawful combination, monopoly, and attempt 
to monopolize, as charged in Paragraph VII hereof, and unlawfully intending to enlarge 
the field of its monopoly and to extend it so as to cover and embrace not only all the 
interstate means and instrumentalities for the carriage of persons and freight in the 
territory above described, but as well the whole of the New England States and between 
those States and the rest of the United States, did, in the spring of 1907, acquire a 
large interest in the capital stock of the defendant, the Boston & Maine Railroad, 
to wit, approximately 110,000 shares, or about 35 per cent, of the total capital stock, 
common and preferred, of said defendant, the Boston & Maine Railroad, through 
and by means of an exchange of its own stock, share for share. This exchange of stock 
having been brought to the attention of the Legislature of Massachusetts, that body 
passed a law (St. 1907, c. 585; approved June 28, 1907) forbidding the acquisition ot 
any further interest in the Boston & Maine stock by the New Haven Co., and pro¬ 
hibiting the exercise of any control of the stock by the New Haven Co., which it had 
already acquired as aforesaid, until July 1, 1908; and your petitioner is informed 
and believes that when said legislative prohibition is removed by the expiration of 
the time designated in the law a large part or the whole of the remainder of said stock 
of said Boston & Maine Railroad will be speedily acquired by the said New Haven 
Co., and a virtual consolidation of the two roads will be effected, unless prevented by 
this honorable court. 

XIV. 


ATTEMPTED MERGER OF THE CONSOLIDATED RAILWAY CO.—THE ELECTRIC RAILWAY 
SUBSIDIARY OF THE NEW HAVEN CO. WITH THE LATTER COMPANY. 

That, in further pursuance of the unlawful combination, monopoly, and attempt to 
monopolize, as charged in Paragraph VII hereof, the defendant, the New Haven Co., 
acting with the ultimate purpose and intent of consolidating its various constituent 
companies, its steam railroad, trolley, steamboat, and other properties, and placing 
them within the direct control of one company, did, on March 26, 1907, secure from 
the Connecticut Legislature an amendment to its charter by which it acquired author¬ 
ity to at “any time hereafter merge, consolidate, and make common stock with any 
or all corporations engaged in transportation, wherever organized, whose property it 
shall hold under lease or a majority of whose capital stock it shall own * * 

that thereupon the New Haven Co. caused the capital stock of its trolley subsidiary 
company, to wit, the Consolidated Railway Co., to be increased from $10,000,000 to 
$30,000,000 for the purpose of taking over the New England Navigation Co., which 
said last-named company was organized in January, 1905, at the instance of the 
defendant, the New Haven Co., for the purpose of consolidating the steamboat prop¬ 
erties which the New Haven Co. had heretofore acquired: that thereupon the said 
defendant, the Consolidated Railway Co., did takeover the New England Navigation 
Co. at a valuation, as your petitioner‘is informed and believes, of $20,000,000, issuing 
in exchange for the stock of said New England Navigation Co. $20,000,000 of the stock 
of the Consolidated Railway Co.; that at the time of this transaction the defendant, 
the New Haven Co., owned all the stock of the New England Navigation Co. and all 
the capital stock of the Consolidated Railway Co., the result of such transaction being 
simply to transfer the nominal control of the New England Navigation Co. to the Con¬ 
solidated Railway Co., while the actual control of each company was at all times in 
the New Haven Co.; that thereafter, to wit, on May 31, 1907, by authority and vote 
of the stockholders of the defendants, the New Haven Co. and the Consolidated 
Railway Co., the Consolidated Railway Co. was merged with and into the New Haven 
Co. without extinguishing the corporate existence of the Consolidated Railway Co.; 
that by virtue of this so-called merger the rights, corporate powers, and franchises of 
the defendant, the Consolidated Railway Co., were assumed to be and were treated 
as though the same vested in the defendant, the New Haven Co., and since said time 
the New Haven Co. has assumed and exercised direct control of practically all the 
electric urban and interurban lines, lighting, gas, and water supply works formerly 
owned or operated by the defendant, the Consolidated Railway Co. 

XVI. 

And your petitioner alleges that if the relief prayed for in this petition is refused 
by this honorable court, not only will the New Haven Co. retain its control of the elec¬ 
tric urban and interurban systems, as hereinbefore described, and hold a large por- 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 75 


tion of the stock of the Boston & Maine Railroad, which it has already acquired, as 
aforesaid, and thereby perpetuate the suppression of competition which would exist 
between the said the New Haven Co. ana the said electric urban and interurban sys¬ 
tems. and between the said the New Haven Co. and the said Boston & Maine Railroad, 
but that a situation wifi be created with respect to the transportation instrumentalities 
and facilities of New England which will eventually enable the New Haven Co. to 
dominate„and control for all time the interstate transportation not only among the 
New England States, but between such States and the several other States of the Union; 
and your petitioner further alleges that unless the combination, monopoly, and the 
attempt to monopolize, hereinbefore alleged is restrained and prevented by this 
honorable court, as hereinafter prayed, the New Haven Co. and its officers and direc¬ 
tors and the several other corporate defendants herein named, and their officers and di¬ 
rectors, will acquire, or attempt to acquire, the control and ownership of all the remain¬ 
ing transportation instrumentalities and facilities whereby commerce is or may be car¬ 
ried on and conducted among the several States of New England and between such 
States and the several other States of the Union, and thereby a complete monopoly 
will be established which will absolutely control all interstate transportation among 
the several States of New England and between such States and the several other 
States of the United States and with foreign countries, in violation of the aforesaid 
act of July 2, 1890, and in derogation of the common rights of the people of said States 
of New England and of the United States. 


PRAYER. 


1. In consideration whereof, and inasmuch as adequate remedy in the premises 
can only be obtained in equity, the United States of America prays your honors to 
order, adjudge, and decree that the combination, monopoly, and attempt to monopo¬ 
lize, herein described, is unlawful, and that all acts done or to be done m furtherance 
of the same are in derogation of the common rights of the people of the United States 
and in violation of the act of Congress of July 2, 1890, entitled “An act to protect 
trade and commerce against unlawful restraints and monopolies;” and that the cor¬ 
porate defendants, and each and every one of them, and their officers, directors, 
stockholders, agents, and servants, and each and every one of them, be perpetually 
enjoined and restrained from doing any act in furtherance of or for the purpose of car¬ 
rying out tht same. 

2. That this honorable court adjudge and decree that the corporate defendants 
herein named (except the Boston & Maine Railroad), and each of them in violation 
of the provisions of sections 1 and 2 of the said act of Congress of July 2, 1890, have 
been and now are parties to a combination in restraint of trade and commerce among 
the several States of New England and between such States and the other States of 
the United States, and that each of said corporate defendants have attempted and now 
are attempting to monopolize such trade and commerce as is more particularly de¬ 
scribed in this bill of complaint: and that in pursuance of such combination, monopoly, 
and attempt to monopolize, as herein charged, the New Haven Co., and its officers 
and directors, did organize and cause to be organized the Providence Securities Co. 
and the New England Investment & Security Co. as purely stockholding companies 
to be used as instrumentalities in furtherance of the combination, monopoly, and 
attempt to monopolize, as herein charged; and that the said the New Haven Co., and 
its officers and directors, did, in the manner charged in this petition, cause the Con¬ 
solidated Railway Co. to be used as a holding company and as an instrumentality 
and device in furtherance of the combintion, monopoly, and attempt to monopolize 
such trade and commerce as described in this petition. 

3. And your petitioner prays that the holding and control of the capital stocks of 
the various corporations in this petition named* in the manner and for the purpose 
charged herein, be adjudged and decreed to be in violation of the said act of Congress 
and unlawful and void as in restraint of trade and commerce among the various States 
of the United States and as an attempt to monopolize such trade and commerce. 

4. And your petitioner further prays for the following specific relief: 

(a) That the so-called merger of the Consolidated Railway Co. by, into, and with 

the defendant, the New Haven Co., be decreed and adjudged as ineffectual to create an 
extinguishment of the corporate life and existence of the said the Consolidated Rail¬ 
way Co. . 

(b) That the defendant, the New Ilaven Co., bo ordered and required to restore 
and convey to the defendant, the Consolidated Railway Co., all the franchises and 
property, both real and personal, of every description, including stocks and other 
securities of the New England Investment Security Co. which the said the New 
Haven Co. received, as herein alleged, from the said the Consolidated Railway Co. 
(except the franchises, stocks, and other property of the New England Navigation 


76 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Co.), and that the said the New Haven Co., and its officers, directors, servants, and 
agents, be hereafter forever enjoined and restrained from voting, whether by proxy 
or otherwise-, any of the shares of the capital stock of the said the Consolidated Rail¬ 
way Co., and from receiving any dividends thereon, and from exercising in any man¬ 
ner whatsoever any control or supervision over the affairs and business of the said the 
Consolidated Railway Co. and any of the subsidiary companies owned and controlled 
or operated by the said the Consolidated Railway Co. 

(c) That the defendant, the New Haven Co., and its officers, directors, and agents, 
be hereafter forever enjoined from voting either directly or indirectly, whither by 
proxy or otherwise, any of the shares of the capital stock of the said the Providence 
Securities Co., and that said defendant and its officers, directors, and agents, and each 
of them, be enjoined and restrained from receiving any dividends on the stocks of 
the said the Providence Securities Co., and from exercising in any manner any con¬ 
trol or supervision over the affairs and business of the said the Providence Securities 
Co., or any of its subsidiary companies. 

(d) Thai the defendant, the New Haven Co., and its officers, directors, servants, 
and agents, and each of them, be hereafter enjoined from voting either directly or 
indirectly, whether by proxy or otherwise any of the shares of the capital stock of 
the Boston & Maine Railroad, and from receiving any dividends thereon, and from 
exercising in any manner any control over the affairs and business of the said Boston 
& Maine Railroad, and that the said the New Haven Co. be restrained and enjoined 
from purchasing and acquiring any additional shares of the capital stock of the said 
Boston & Maine Railroad. 

5. And your petitioner, the United States of America, also prays for such other and 
further relief as the nature of the case amy require and that the court may deem just 
and proper in the premises. 

To the tnd, therefore, that the United States of America may obtain the relief to 
which it is justly entitled in the premises, may it please your honors to grant unto it 
writs of subpoena directed to the said defendants, the New York. New Haven & Hart¬ 
ford Railraod Co., the Boston & Maine Railroad, the Consolidated Railway Co., and 
the Providence Securities Co., and to each of them, demanding them and each of them 
to appear herein and answer, but not under oath, the allegations contained in the fore¬ 
going petition , and abide by and perform such order and decree as the court may make 
in the premises; and that pending the final hearing of this case, a temporary restrain¬ 
ing order may issueenjoining the defendant, the New Haven Co., its officers, directors, 
and agents, as hereinbefore prayed. 

Aza P. French, 

United States Attorney for the District of Massachusetts. 

Charles J. Bonaparte, 

Attorney General of the United States. 

Milton D. Purdy, 

Assistant to the Attorney General. 

United States op America, 

District of Massachusetts , ss: 

Asa P. French, being first duly sworn, says that he is the attorney of the United 
States for the district of Massachusetts, and that he has read the foregoing petition by 
him subscribed, and that the statements made therein are true, except as to such mat¬ 
ters a.s are stated on information and belief, and as to those, he believes them to be 
true. He further says that he. was authorized to sign said petition on behalf of the 
United States by the Attorney General of the United States. 

Asa P. French, 

United States Attorney for the District of Massachusetts. 

Subscribed in my presence and sworn to before me this-day of-, 1908. 


Exhibit “A.” 

[Special Laws of Connecticut, 1905, p. 706. H. J. Res. No. 402. 274.) 
amending the charter of the consolidated railway CO. 

Resolved by this assembly: That, whereas the corporation originallv created as the 
Thompson Tramway Co., whose name was changed to be the Worcester & Connecticut 
Eastern Railway Co. and afterwards to be the Consolidated Railway Co., has by 
virtue of the powers granted in its charter acquired by purchase and now holds, 
enjoys, and exercises the property and franchises of certain corporations of this State, 


4 




X. V., X. H. <fc HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


77 

to wit: The lair Haven <k Westville Railroad Co., the Winchester Avenue Railroad 
Co., the Peoples Tramway Co., the Danielson & Norwich Street Railway Co., the 
Norwich Street Railway Co., the New London Street Railwav Go., the Montville 
Street Railway Co., the Middletown Street Railway Co., the Meriden Electric Rail¬ 
road Co., and the Wallingford Tramway Co., which corporations by purchase, con¬ 
solidations, or leases had acquired and were using, exercising, and enjoying the 
property and franchises of other corporations of this State, to wit: The New Haven 
<k North Haven Street Railroad Co., the New Haven & Centerville Street Railway 
Co., the New Haven Street Railway Co., the New Haven & Morris Cove Railroad 
Co., the New Haven 6c East Haven River Railroad Co., the State Street Horse Rail¬ 
road Co., the Whitney Avenue Horse Railway Co., the Edgewood Street Railway 
-Co., the New Haven & Meat Haven Horse Railroad Co., the Meat Shore Railway 
Co., the Putnam 6c Thompson Street Railway Co., the Portland Street Railway C’o., 
and the Lake Saltonstall Railway Co. And whereas said first-named corporation 
has petitioned this general assembly to renew and extend for its use and enjoyment 
the rights, privileges, franchises, and powers granted in its charter and amendments 
thereto and in the charters and amendments thereto of such other corporations and 
to grant to it additional powers. 

Section' 1 . The said corporation now existing under the name of the Consolidated 
Railway Co. shall have the power in this State and eLsewhere to transport persons 
or property, or both, as a common carrier and to acquire, establish, hold, maintain, 
use, and operate in this State and elsewhere, subject to all laws then and there in force 
any property or instrumentalities lawful and suitable for any such purpose, or directly 
or indirectly connected with the business of transportation: but a majority of its 
directors shall at all times be residents of this State. The location and construc¬ 
tion of all tracks, switches, crossovers, fixtures, poles, wires, and appurtenances 
now used or operated by said corporation are hereby validated and confirmed as 
at present existing for the use and benefit of said corporation; and any«and all rights 
to construct any lines of electric railways or street railway heretofore granted by 
the general assembly to said corporation, or to any of the corporations named in the 
preamble to this resolution, except the right to construct such a railway from Jewett 
City to Norwich by way of Preston, granted to the Danielson & Norwich Street Rail¬ 
way Co. by resolution approved May 14, 1901, which have not expired by limitation 
of time, are as distinct and separate local franchises hereby extended and continued 
in force to said corporation whose charter is herein amended until July 1, 1907. 

Sec. 2. Said corporation whose charter is herein amended shall have power and 
authority, as a matter of public convenience, subject to all general laws governing 
the construction of railways in streets or highways, to locate, construct, maintain, 
and operate railroads, railways, or tramways for the transportation of passengers 
or goods, or both, with single or double tracks and such turnouts and switches and 
connections and fixtures and appurtenances as may be necessary for the most effi¬ 
cient, economical, and advantageous conduct of said business upon the streets, high¬ 
ways, and public grounds upon which said corporation now operates or shall here¬ 
after lawfully operate a railroad, railway, or tramway : and upon any private lands 
and across intersecting streets or highways in any of the towns within which said 
company shall lawfully operate an electric railway; and also upon the streets, high¬ 
ways, public grounds, private lands, and routes named or generally described here¬ 
after in this section, as follows: 

From any point on the Baltic line of railway of this company in the town of Nor¬ 
wich to, into, and through the borough of Jewett City; and also thence to a connec¬ 
tion with its existing railway in the town of Plainfield on such streets, highways, 
public grounds, andprivate lands in the towns of Norwich, Sprague, Lisbon, Can¬ 
terbury^ Plainfield, and Griswold as it may find most suitable and advantageous 
for the construction, operation, and maintenance of a railway: also from a connec¬ 
tion with the tracks of the Consolidated Railway Co., on Main Street in the town of 
Portland, thence through and along the main highway between Portland and Glas¬ 
tonbury, or on private way near to said highway, to connect with the tracks of the 
Hartford Street Railway Co. at South Glastonbury, so called, in the town of Glaston¬ 
bury: also in the town' of Middletown through Court Street from Main Street to the 
private way running east of land of the Middlesex Banking Co., and from a connec¬ 
tion with its tracks in Main Street just southerly of the tracks of the Air Line Branch 
of the New York. New Haven A Hartford Railroad Co., northerly through said Main 
Street crossing over the tracks of said railroad and through North Main Street to 
and across Johnson Street, thence northwesterly through private way crossing West 
River to and across Newfield Street, thence northwesterly through private way 
crossing intersecting highways to connect with the tracks of the Middletown, Meri¬ 
den & Waterburv Railroad near the Westfield station of said railroad, or upon and 


78 N. Y., N. H. & HARTFORD AND GRAND TRUNK R, R. AGREEMENT. 


aloDg or across other highways, excepting Washington Street between Main Street 
and Park Place and High Street between Church and Lincoln Streets; also on pri¬ 
vate lands from some convenient point on its existing railway in the town of Middle- 
town to some other convenient point on said Middletown, Meriden <fc Waterbury Rail¬ 
road; also from a connection with its tracks at the comer of Main and Broad Streets, in 
the town of Meriden, thence through North Broad Street and the New Haven & Hart¬ 
ford turnpike to the terminus of the tracks of the Connecticut Railway and Lighting 
Co. in the town of Berlin; also from a connection with its tracks in Griswold Street, in 
the town of Meriden, thence through North Colony Street and the Old Colony Road 
so called, to and along the New Haven and Hartford Turnpike in the town of Berlin. 

Also from a connection with its tracks, at the corner of Broad and Curtis Streets, 
in the town of Meriden, southerly through said Broad Street, to a point near John¬ 
son’s Lane, so called; thence southerly through private way between Broad and 
Curtis Streets, crossing intersecting highways, to a point near the main highway to 
Yalesville; thence southerly through private way, North Colony Street, South 
Colony Street, and through private way near to the New York, New Haven & Hart¬ 
ford Railroad, crossing intersecting highways to a connection with its tracks near 
the southerly end of South Main Street, in the town of W allingford, or from the 
above-mentioned point near the main highway leading to Yalesville; thence through 
private way crossing intersecting highways and through North Main Street to a con¬ 
nection with its tracks in said North Main Street in the town of Wallingford. Also 
in Meriden from a connection with its tracks in Pratt Street northerly through pri¬ 
vate way to connect with the tracks of the Middletown, Meriden & W aterbury Rail¬ 
road, so called, or from a connection with its said tracks in Pratt Street through said 
Pratt Street and North Broad Street to connect with the tracks of said Middletown, 
Meriden & Waterbury Railroad; also, from a connection with its tracks in West Main 
Street, near the corner of Bradley Avenue, in said Meriden, southwesterly through 
private way to connect with the tracks of the said Middletown, Meriden & Water- 
bury Railroad; also, from a connection with its tracks at the comer of Hanover 
Street and Cook Avenue, in said Meriden, southerly through said Cook Avenue and 
the Old Colony Road, so called, to connect with its tracks at Archer’s corner, so 
called. 

Also from a connection with its tracks on Main Street, at the intersection of Cook 
Avenue, in the town of Meriden, thence along Cook Avenue to Old Colony Road and 
through Old Colony Road to a connection with its present tracks on Hanover Avenue 
at Archer’s Corner, so called; also, in said Meriden from a connection with present 
tracks at the intersection of Main and Broad Streets, along Broad Street to Britania 
Street, and along Britania Street to a connection with present tracks at the inter¬ 
section of Griswold Street; also, in said Meriden from present end of track on Pratt 
Street to Broad Street; also, from a connection with its tracks at the corner of State 
and Division Streets, in the town of Hamden, northerly along State Street to Broad¬ 
way; thence easterly through said Broadway, or through private way near to said 
Broadway, passing under or oyer the tracks of the New York, New Haven & Hartford 
Railroad Co., to connect with its tracks in Washington Avenue, in the town of North 
Haven; also, from a connection with its tracks at Mount Carmel, so called, in the 
town of Hamden, in a northeasterly direction through private way to a point in the 
highway south of Mount Carmel at the top of the hill just cast of Mill River; thence 
through said highway to the New Haven & Hartford turnpike; thence through said 
through said turnpike and River Street to a connection with its tracks in the town of 
Wallingford, or from a connection with its tracks at said Mount Carmel northeasterly 
in a nearly direct line through private way crossing intersecting highways to a point 
near the intersection of the above-mentioned highways, south of Mount Carmel, 
with the New Haven & Hartford Turnpike; thence northerly along said turnpike 
and River Street or on private way near to said highways to a connection with its 
tracks in the town of Wallingford. 

Also from a connection with its tracks from the corner of the Old Colony Road, sp 
called, and Oak Street, through said Old Colony Road, crossing under the tracks of 
the New York, New Haven & Hartford Railroad Co., and through North Colony 
Street to a connection with its tracks in Center Street, all in the town of Wallingford, 
also, from its tracks on Central Avenue, in the town of Norwich, turning out on 
Twelfth Street to reach the car house in the new location; also, from a connection with 
its tracks at the corner of Campbell Avenue and Thomas Street in said town of Orange, 
thence through Thomas Street, Peck Avenue, Brown Street, and Second Avenue to 
connect with its tracks in Elm Street, or from a connection with its tracks at the cor¬ 
ner of Campbell Avenue and Thomas Street, in said town of Orange, through Thomas 
Street and East Avenue or Meadow Street to Blohm Street; thence through Blohm 
Street and Second Avenue to connect with its tracks in Elm Street; also, from a 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 79 


connection with its tracks at the corner of Campbell Avenue and Milford Turnpike, 
in said town of Orange, through Campbell' Avenue or Forest Street, to connect with 
its tracks in Derby Avenue, this last-described route to be operated in the summer 
season only; also, from a connection with its tracks on Truman Street, near Blinman 
Street, in the town of New London, thence through said Truman Street to connect 
with its track near Shaw Street. 

Also from a connection with its tracks on Bank Street at the intersection of Truman 
Street, in the town of New London; thence along Truman Street to a connection 
with its tracks on Truman Street at the intersection of Blinman Street; also from a 
connection with its tracks at the corner of Chapel and Norton Streets, in the town of 
New Haven; thence through Chapel Street to a point near the westerly boundary of 
Edgewood Park; thence southerly through private way crossing intersecting high¬ 
ways to connect with its tracks in Derby Avenue near St. Lawrence Cemetery, in the 
town of Orange; or from a connection with its said tracks at the corner of said Chapel 
and Norton Streets; thence through Chapel Street to its intersection with the proposed 
extension of Yale Avenue; thence southerly through said extension of Yale Avenue and 
Yale Avenue as at present laid out to connect with its tracks in Derby Avenue, in the 
town of Orange; also from a connection with its tracks at the corner of said Yale and 
Derby Avenues; thence through Yale Avenue and Maltby Avenue, and thence through 
Central Avenue or through private way to connect with its tracks in Derby Avenue 
near St. Lawrence Cemetery, said route being partly in the town of New Haven and 
partly in the town of Orange, the railway upon these three last-described routes to 
be operated in the summer season only; also from a connection with its tracks in 
Townsend Avenue at the corner of Concord Street; thence through Concord Street 
and Morris Causeway, so called, to connect with its tracks in the old Lighthouse Road; 
also from a connection with its tracks in Whitney Avenue at the corner of Lawrence 
Street through Lawrence Street to connect with its tracks in State Street. 

Also from a connection with its tracks in Winthrop Avenue at the corner of Oak 
Street, in the town of New Haven, through Winthrop Avenue to connect with its 
tracks in George Street; also from a connection with its tracks in Meadow Street 
through New Union Avenue to a connection with its tracks in State Street, in the town 
of New Haven; also from a connection with its tracks in its car house at the corner 
of Clay and Fillmore Streets; thence through said Clay Street to connect with its 
tracks in Ferry Street, all in the town of New Haven; also from a connection with 
its tracks at Lighthouse Point, in the town of New Haven; thence easterly through 
private way near and approximately parallel to the northerly shore of Long Island 
Sound to connect with its tracks at Momaugin, so called, in the town of East Haven, 
said railway to be operated in the summer season only. Said corporation may make 
traffic agreements with any railroad company or street railway company, and shall 
have the right and power, with the consent of any railroad company or street railway 
company, to construct and maintain connections at grade of its tracks with any tracks 
of such railroad company or street railway company and crossovers upon private land 
at grade for the purpose of making such connections. 

Sec. 3. The said corporation whose charter is herein amended is hereby authorized 
and empowered to acquire and develop water powers for the generation of electricity, 
and to construct and acquire or hold, use, and operate plants for the generation of 
electricity by means of water power or steam or both or by any other means, and 
also to establish and maintain upon any private lands and across, over, or under any 
streams or waters and, subject to the provisions of sections 3904, 3905, 3906, and 3907 
of the general statutes, along or across and upon, above, or under the streets, highways, 
and public grounds upon which it shall lawfully operate an electric railway, or which 
shall form a part of its route adopted for the transmission of electricity from any place 
where it is generated or developed to any part of any lines of railroads or railways 
where such electricity is to be used or applied, suitably constructed and supported 
conductors, including lines of poles and wires and underground conduits and wires, 
and properly supported cables, and including all proper fixtures and appurtenances, 
and also to transmit therewith, thereby, or therein electricity in such manner and of 
such quantities and pressures as said corporation shall find necessary for the best 
conduct of its business. 

Sec. 4. Said corporation whose charter is herein amended is hereby authorized and 
empowered from time to time to acquire by lease, purchase, or otherwise upon such 
terms and conditions as may be agreed upon, and to hold, use, exercise, enjoy, and 
dispose of the whole or any part of the capital stock, evidences of indebtedness, con¬ 
tracts, property, rights, powers, privileges, and franchises of any other corporations, 
whether of this State or of any other State, and whether now or hereafter existing, 
which are or shall be engaged or authorized to engage in the transportation of persons, 
or property, or both, or in the generation or development of electricity or of any 


80 N. Y.. X. K. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


power, and to issue either its capital stock,.or its bonds, or other evidence of indebt¬ 
edness, or any or all of them, to such amount as said corporation whose charter is 
herein amended shall find necessary for the purpose of effecting such acquisition or 
for other lawful purposes of its business. Every franchise, right, power, or privilege 
heretofore, now, or hereafter granted to or purchased by the corporation whose char¬ 
ter is herein amended shall be held, enjoyed, and exercised by said corporation 
without suffering qualification or abatement by construction because of its also hold¬ 
ing by grant or purchase other franchises, powers, or privileges of a similar nature, 
but, of a more limited, qualified, or conditional character. 

Every corporation, whether now or hereafter organized, authorized by this State to 
engage in the transportation of persons or property, or both, or in the generation or 
development of electricity or of any power, or actually engaged in any such business 
within this State; or any corporation of this State which shall own or control 
at least three-fourths in amount of the capital stock of any such corporation, 
after a vote so to do of three-fourths in interest of its stockholders at a meeting 
called for the purpose of taking the matter into consideration, upon notice 
of the time, place, and object of the meeting published in a newspaper, in the 
city or town in which such corporation has its principal office, twice a week for four 
weeks, or if all the newspapers published in said city or town are weekly 
newspapers, then once a week for four weeks, or if no newspaper is published 
in said city or town, then twice a week for four weeks in some newspaper published 
in the county in which said city or town is located, may sell, convey, lease, or other¬ 
wise dispose of, to said corporation -whose charter is herein amended, the whole or any 
part of its property, contracts, rights, powers, privileges, and franchises, for a con¬ 
sideration to be paid, whether once for all, or periodically as interest, rent, or other¬ 
wise, in cash, shares of stock, and obligations of the latter corporation, or in either or 
any of them, or on such other terms and conditions as may be agreed upon between 
said corporations. No vote of any such corporation or any of the things performed 
thereunder or in pursuance thereof shall be invalidated, affected, or questioned in 
any way because all or any part of the stock or other securities of either or any of the 
corporations contracting as aforesaid or participating in any such sale, conveyance, 
lease, or other arrangement may be owned or controlled by or held by or for any 
other one of said corporations, or because stockholders, directors, or officers of any 
such contracting or participating corporation shall be stockholders, directors, or 
officers, or shall be otherwise interested in any other of said corporations. 

Any holder of stock of any such contracting or participating corporation whose 
property or franchises shall be sold, conveyed, leased, or otherwise disposed of who 
shall not vote for such sale, lease, or other disposition of the same and shall not 
receive anything on account thereof, and who shall dissent from or object thereto, 
may, at any time within 30 days after the making of such sale, conveyance, lease, 
or other disposition, commence a civil action against said corporation whose charter 
is herein amended by complaint to any judge of the superior court, who shall on 
reasonable notice to said corporation appoint three judicious and disinterested persons, 
who shall be paid for their time actually spent in the matter and their services by said 
corporation, and who shall appraise the full market value of such stock -without regard 
to any depreciation or appreciation thereof in consequence of said sale, conveyance, 
lease, or other disposition. Their appraisal or that of a majority of them shall be re¬ 
turned in writing under the hands of those making the same to the clerk of the superior 
court within and for New Haven County, to be by him recorded among the records 
of said court; and thereupon such appraisal shall be final and conclusive between 
the parties and shall have the effect of a judgment of said court in favor of said stock¬ 
holder against said corporation; and execution thereon may issue at the end of 60 
days from the time of such return. 

Upon payment to such stockholder of the value of his said stock as determined by 
such appraisal, or, in case of refusal to accept the same or any legal disability or ab¬ 
sence from the State of such stockholder, upon deposit of the proper amount deter¬ 
mined as aforesaid with said clerk of the superior court, to be held for the benefit of 
such stockholder subject to the direction and order of said court, said stockholder 
shall be bound to transfer his said stock to the said corporation to be disposed of by 
the directors thereof or retained and used for the benefit of the said corporation or its 
stockholders; and said court may make any order or decree proper to secure or effect 
the transfer of said stock to said corporation, which order or decree shall have the 
effect of a judgment in the civil action instituted by such stockholder, and may be 
passed after making other persons or corporations parties to said proceedings upon 
such notice as the court may prescribe. 

If any stockholder shall vote for such sale, conveyance, lease, or other disposition, 
or if he shall receive anything on account thereof, or, if he does not so vote and does 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 81 


not receive anything on account thereof and nevertheless shall fail to avail himself 
of the foregoing provisions to have his stock appraised within the time limited, he 
shall be bound finally and conclusively by said sale, conveyance, lease, or other dis¬ 
position, and shall be forever estopped to call in question said sale, conveyance, lease, 
or other disposition, if lawfully made, or any of the things lawfully performed there¬ 
under or in pursuance thereof. 

If under the terms agreed upon by such contracting or participating corporations 
as a consideration for said sale, lease, or other disposition, anything is to be paid or 
delivered by said corporation whose charter is herein amended to any stockholder 
coming under the provisions of the preceding sentence and such stockholder shall, 
upon a tender of what is to be thus paid or delivered to him, refuse or neglect to per¬ 
form all acts and do all things required of such stockholder under or by virtue of the 
•said agreed terms and to comply therewith in all respects, then said corporation may, 
in its discretion, in preference to resorting to other lawful remedies, deposit what 
such stockholder is so entitled to receive with the treasurer of the State of Connecticut, 
to be held by said treasurer and his successors in office for the use and benefit of and 
subject to the order of such stockholder, his heirs, executors, and administrators, or 
his assigns, and upon such deposit the corporation whose charter is herein amended 
shall have and enjoy all titles and rights and may exercise all powers which under 
or by virtue of the said agreed terms it would be entitled to have, enjoy, and exercise, 
respectively, after full compliance with said terms by such stockholder. If after any 
such deposit is made the stockholder for whose use and benefit it is made shall com¬ 
mence a civil suit against said corporation in accordance with the preceding provi¬ 
sions of this section, all right and interest of such stockholder in said deposit shall 
thereby forthwith be terminated, and thenceforth the treasurer of the State shall hold 
such deposit for the use and benefit of and subject to the order of said corporation. 

Sec. 5. Said corporation whose charter is herein amended shall have full right and 
power from time to time, any other law to the contrary notwithstanding, to guarantee 
the contracts and the bonds or other obligations of any other corporation, now or here¬ 
after and wherever organized, which is engaged or authorized to engage in the trans¬ 
portation of persons or property, or both, or in the generation or development of elec¬ 
tricity or of any power, and of any corporation, association, or partnership, now or 
hereafter and wherever organized, which owns or controls at least a majority of the 
capital stock of any such other corporation, and to guarantee the payment of interest 
on such bonds or other obligations of any such other corporation or dividends on the 
capital stock of any such other corporation. 

Sec. 6. The corporation whose charter is herein amended shall, for the sake of the 
convenience of the public, have the right to take, with the approval of the railroad 
commissioners, in the manner provided in section 3687 of the general statutes, real 
estate, including lands and interests in lands, rights of flowage, and easements of any 
nature, for the purpose of constructing or improving any railroad or railway which it 
shall have the authority or right to construct or operate, or for the purpose of devel¬ 
oping any water power or transmitting electricity in accordance with the provisions 
of section 3 of this resolution. Whenever in the development of any water power 
it shall become necessary or convenient to alter the grade or course of any road or 
highway the said corporation may, at its expense with the consent of the municipal 
authorities having charge of the maintenance of such road or highway, make the 
proper changes in the grade or course of such road or highway in such manner as not 
to impair its usefulness and so as to leave it in a condition acceptable to said municipal 
authorities; and said corporation shall be liable to any owner of land adjoining a high¬ 
way so changed or of any interest in such land for any special damage to him caused 
by such change. 

The provisions of'this section shall not authorize or permit the taking of any natural 
pond, or of any lake, or of any dam or developed water power, or of any real estate 
naturally appurtenant to or suitable for the development of any particular water power 
of any corporation which has been' heretofore chartered by the general assembly or 
has been heretofore organized under the general corporation law, with authority to 
develop such water power and which has already acquired any real estate for all or 
any part of its water-power purposes, or of any real estate already acquired by a manu¬ 
facturer for the purpose of further reasonably developing for the necessities of his 
business an already developed water power used iii such manufacturing business, 
nor shall said corporation have power to take any land or water rights acquired by 
any public or private corporation for the purpose of supplying any community with 
water for public or domestic use. When any feme covert, infant, cestui que trust, 
or person non compos mentis shall be interested in property required by said cor¬ 
poration for any of the purposes aforesaid said property shall be taken under this 
section on giving notice to the husband of such feme covert, the trustee of such cestui 

72177—13-6 


82 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

que trust, the guardian, either natural or appointed, of such infant, and the con¬ 
servator of such person non compos mentis, who may, respectively, givfe releases for 
all damages for lands so taken as fully as if the same were holden in their own right. 

Sec. 7. The corporation whose charter is herein amended shall have the power to 
acquire by purchase, lease, or otherwise and hold real estate for pleasure grounds 
for the recreation of the patrons of its railroads or railways, to develop and maintain 
such pleasure grounds and provide therein any lawful instrumentalities of popular 
recreation, and to charge tolls for admission to such grounds and also for the use and 
enjoyment of such instrumentalities of recreation. Such pleasure grounds and the 
rights conferred by this section may be sold, leased, or otherwise disposed of to any 
other person or corporation. 

Sec. 8. Nothing in this resolution shall authorize or permit the operation of a rail¬ 
road, railway, or tramway by steam along any street or highway. Nothing in this reso¬ 
lution shall authorize or permit the building or extension within this State of a railroad, 
railway, or tramway so as to parallel any street railway or electric railway or steam 
or other railroad of any other company without the consent of such company or a 
finding by a judge of the superior court, after application, notice, and hearing as 
provided in section 3846 of the general statutes, that public convenience and necessity 
require the building or extending of such railway or tramway. Nothing in this reso¬ 
lution shall authorize or permit the construction within this State of a railroad, street 
railway, electric railway, or tramway within any town within which any other com¬ 
pany shall have the charter right to construct a railroad, street railway, electric railway, 
or tramway of any description without the consent of such other company, except upon 
routes, streets, and highways upon which the right to construct a railroad, street 
railway, electric railway, or tramway has been or shall hereafter be specifically granted 
to the corporation whose charter is herein amended, or to a corporation which shall 
lawfully hold its franchises, or to a corporation whose franchises shall have been by 
it lawfully acquired. 

Sec. 9. The said corporation whose charter is herein amended is hereby located in 
the town of New Haven. 

Sec. 10. Nothing in this resolution shall affect any action now pending or any 
remedy claimed therein. 

Approved, May 25, 1905. 

Mr. Hardwick. The allegations are that all those transactions are 
in violation of the existing Federal law? 

Mr. White. Yes, sir; and the amendments thereof. 

I want to submit Gov. Curtis Guild’s further statement in his own 
newspaper in regard to this matter. It is as follows: 

TUNNELS. 

Among the propositions put forward by the Morgan railroad monopoly of Massachu¬ 
setts, in relation to the prevention of the entrance of any competing lines into Boston, 
is the suggestion of a tunnel connecting directly the Boston & Maine system and the 
roads running from the South Station. 

The first proposition was a highly expensive plan of a tunnel under the city itself, 
with the added proposition that the people should themselves, in part at least, pay the 
bill. 

This proposition is now modified. It is now proposed that a less expensive tunnel 
shall be built under the harbor, not the city, from East Boston to the South Station. 
This tunnel would not merely be used to convey passengers from the northern suburbs 
to the southern suburbs. By the utilization of the old right of way still possessed by 
the old Eastern Railroad, now merged in the Boston & Maine, express trains from the 
North could be switched off at Revere from the main line and run through East Boston 
under the harbor via the South Station to New York. 

There is no question that such a course would be of the greatest possible value to 
New York and of the greatest possible value to the railroad. Customers in Maine and 
New Hampshire would thus be brought to New York with a minimum of inconvenience 
and New Yorkers and westerners could be swung down to Bar Harbor and other sum¬ 
mer resorts without the necessity of even patronizing a cab in Boston. It is obviously 
for the benefit of the railroad to keep a passenger on its cars the longest possible time. 
If a Bangor dry goods merchant can be persuaded to buy his goods in New York instead 
of Boston, the railroad gets a fare to and from Boston that it otherwise would not have. 
It also gets more money in freight on the goods bought in New York and hauled the 
longer distance. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 83 


In the first flush of a new enterprise such swift transportation under the city appeared 
to many of us as a beautiful desideratum, but sober second thought suggests that it may 
be a very serious injury to Boston. 

New York has tunnels and tubes for the promotion of local traffic, but for the promo¬ 
tion of local traffic exclusively. If such tunnels connecting main passenger lines were 
a help to New York, why has not the Pennsylvania system been so connected with the 
New York Central and New York, New Haven & Hartford system that a passenger may 
be swiftly conveyed from Jacksonville, or Washington, or Louisville, or Philadelphia 
to Boston without ferry or change of cars in New York? 

The answer is obvious. By deliberately separating New York’s great stations and 
by encouraging stopping in New York, New York is thereby made a terminus, not a 
way station. 

Philadelphia once did a tremendous jobbing trade with the South. Philadelphia 
is now a way station. The southern buyer is whisked by Philadelphia to New York. 
New York gets the trade and the railway gets the extra pay for the additional distance 
traveled. Portland was once a terminus. The merger of the Northern New Eng¬ 
land roads with swift through trains to Boston made Portland a way station. Boston 
got the extra trade and the railroad pocketed the extra railroad fares as well as the 
extra freight and express rates on goods shipped from a more distant distributing 
center. 

To-day Boston is at once a terminus and a halting place. It is the journey’s end fo 
those who at present come from northern New England to buy supplies of Boston 
jobbers. It is a convenient halting place for those who are tempted to break here 
the long journey from the West to the summer resorts in Maine, our own north shore, 
and New Hampshire. 

Every man, woman, and child rushed through Boston without stopping reduces 
not merely the number of wholesale buyers in Boston, but the number of retail buyers 
who not merely patronize the hotels and theaters during the short stay en route, but 
purchase supplies at Boston department stores, groceries, china shops, and establish¬ 
ments for the sale of tents, canoes, guns, fishing rods and other out-of-door parapher¬ 
nalia. 

Make Boston a way station, as proposed, and you reduce the number of people who 
stop at Boston hotels over night. Reduce your hotel patronage, cut off even those 
who spend but a single night in the city, and you reduce to that extent the patronage 
of theaters, concerts, art exhibits, and especially of the retail shops. 

The Morgan monopoly tunnel, as proposed, would take many of those now spending 
their money here straight through Boston to New York to spend their money there. 

The Boston and Eastern Tunnel,|as proposed, with a terminus in Post Office Square, 
would bring more people to Boston to spend money in Boston, not only from Revere 
Beach and Lynn, but from more distant points. 

Clinton White and George W. Bishop of the Massachusetts Railroad Commission are 
trying to make Boston a way station. 

Walter Perley Hall of the Massachusetts Railroad Commission voted to make Boston 
a terminus. 

The way-station plan with the long haul means the most for the railroad. 

The terminus plan means the most for Boston. 

Would real estate, for example, in the vicinity of the North Station, improve in 
value if all the through express trains were switched off at Revere, through a tunnel, 
and the North Station made not even a way station, but the mere terminus of a spur 
track? 

Think it over. 

I also want to present this committee with the reports of James R. 
Crozier opposing the merger of these systems, and dissenting from the 
majority report of the commission on commerce and industry, which 
has been reprinted at the request of the Massachusetts State Branch 
of the American Federation of Labor. 


84 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


It is as follows: 

THE DISSENTING REPORT OF JAMES R. CROZIER OPPOSING THE MERGER OF THE NEW 

YORK, NEW HAVEN & HARTFORD AND BOSTON & MAINE RAILROAD SYSTEMS AND 

DISSENTING FROM THE MAJORITY REPORT OF THE COMMISSION ON COMMERCE AND 

INDUSTRY. 

[Reprinted at the request of the American Federation of Labor, Massachusetts State Branch.] 

March, 7, 1908. 

To the honorable senate and house of representatives in general court assembled: 

I am opposed to the merger of the New York, New Haven & Hartford and Boston 
& Maine Railroads, whatever be the form of merger proposed and whatever pretended 
safeguards may be provided. I am strengthened in this opinion by the knowledge 
that my predecessor on this commission, the late lamented Edward Cohen, held the 
same views. 

The consolidation of railroads in Massachusetts has already gone far beyond the point 
of safety for the people and the best efficiency on the part of the companies. The 
New Haven and the Boston & Maine are each now so large that the people do not 
get the best possible service. 

Two serious mistakes were made by the legislature of 1900, when it permitted the 
New York Central to lease the Boston <fc Albany, and the Boston & Maine to lease 
the Fitchburg Railroad. The majority of the commission recognize that the people 
have suffered from both of those mergers, but instead of accepting the disastrous 
results of those two mergers as a warning example, they recommend to the legislature 
another and still larger consolidation. 

The majority of the commission advise the legislature that the best form of merger 
is to allow the New Haven to hold the stock of the Boston & Maine which is acquired 
without authority under Massachusetts law, and to let it buy more. That seems 
to me the most dangerous of all forms of merger. It would give the New Haven full 
control, without its being obliged to assume any responsibility. 

The majority of the commission propose, as practically the only safeguard, to give 
to the Commonwealth, if it is not satisfied with the New Haven’s management after 
five years, the right to buy from the New Haven the Boston & Maine stock at its market 
value. I do not believe that the people will consider this an adequate safeguard. 
I am sure that it is a very one-sided bargain, and a very dangerous one to the people 
of Massachusetts, when one considers how market values are constantly manipulated. 

The objections to this merger can not be removed by any mere change of form, 
or by providing any additional safeguards. The main objection is that a merger of 
these two railroad systems would result in a complete monopoly, not only of all rail¬ 
road transportation in Massachusetts, but of all methods of transportation—of steam¬ 
ship lines and trolleys, as well as the railroads. It has been the steady policy of the 
New Haven Co. to secure such a monopoly wherever it has any railroads. It has 
pursued everywhere the policy of suppressing all competition, regardless of the cost 
to the Community of its doing so. It has followed this policy in Massachusetts regard¬ 
less of our law and of its own promise to the contrary. 

Gov. Guild pointed out to the legislature of 1906 that “healthy competition in 
western Massachusetts is already throttled.” Since then the New. Haven Co. has 
extended its monopoly in central and southern Massachusetts. It is trying to make 
its monoply in Massachusetts as complete as its monopoly is in Connecticut and Rhode 
Island. It owns already every steamship line between New York City and the New 
England States with the possible exception of one. No such complete monopoly in 
transportation can be found in any other part of the United States. Capitalists may 
approve an extension of this monopoly, but I can not believe that the people of Massa¬ 
chusetts will. The people know the evils of monopoly and its dangers. 

I desire also to record my emphatic protest against the methods of secret investi¬ 
gation which the subcommittee on transportation adopted. 

There is scarcely a man or woman in Massachusetts who has not some knowledge 
of our transportation facilities. There is scarcely a man or woman in Massachusetts 
who has not some opinion as to whether a transportation monopoly in the hands of 
aliens is or is not a good thing for the people of Massachusetts. 

The legislature of 1907 intended that, unless the New Haven Co. abandoned its 
attempt to control the Boston & Maine, the people should have an opportunity to 
be heard on this question. The act passed last year, entitled “An act to restrain the 
consolidation of railroad corporations,” provided in substance that if the officers or 
stockholders of either of the railroad companies desired, they might apply to the rail¬ 
road commissioners for a hearing on the question whether the consolidation “is con- 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 85 

Bistent with the public interests.” Under the law, hearings before the railroad com¬ 
missioners would have been public. The corporations and capitalists who favor the 
merger would have been obliged to present their evidence and their arguments. 
They would have been subject to cross-examination in public, and the people who 
oppose the merger would have had an opportunity of presenting their evidence and 
their arguments. 

Those who favor the merger evidently did not dare to follow the method which 
the legislature provided of a public investigation. They did not make any applica¬ 
tion t;o the railroad commission; and, instead of that, the commission on commence 
and industry, which was appointed for an entirely different purpose, undertook to 
make an investigation conducted privately. 

Not only has no public hearing been given by the subcommittee on transportation, 
which undertook the investigation, but the public was not even notified that the 
merger question was being considered by this commission. Indeed, the fact that 
members of this commission were investigating the subject was known only to a few 
people until after the legislature convened and at the time when the report of the com¬ 
mission should have been filed. 

The records of the commission disclose that a few persons were, at the invitation 
of the subcommittee, or upon their own request, privately heard by the commission. 
Those heard were mainly persons connected with the public service or transportation 
companies, capitalists, or lawyers. I do not find in the list a single representative of 
labor, organized or unorganized, or of those who work for salaries, and only very few 
who are merchants or manufacturers. 

The records kept by the commission do not disclose that hearings were given to 
officials or counsel of the New Haven Co.; but I am informed that the majority of 
the commission has had private conferences and other communications with them. 
Indeed, I find on examining the records a memorandum (of which copy is annexed) 
of a communication made three months ago by the members of the subcommittee on 
transportation, who constitute a majority of this commission, to the vice president of 
the New Haven Co. 

December 12, 1907. 

We can not, of course, commit ourselves by predicting what our final conclusions 
and recommendations may be, but we are willing to say personally that we are now 
engaged in considering the subject of the control of the Boston & Maine by the New 
York, New Haven & Hartford Railroad, in the attempt to determine upon safeguards 
which would make the arrangements safe for the Commonwealth. In this situation 
we should be sorry if the New York, New Haven & Hartford should now take action 
which would cut off all possibility of some arrangement being entered into which 
might conduce to the welfare of the Commonwealth, and the company as well. 

(Conversation with Mr. Byrnes over telephone, Dec. 12, 1907.) 

J. B. W. 

G. G. C. 

C. F. A., 2d. 

Upon my appointment to this commission I found that the majority were preparing 
a report on the merger. I therefore gave all my time to that question, and have not 
considered any other. 

James R. Crozier. 


THE ALLEGED ADVANTAGES OF MONOPOLY. 

Vice President Byrnes has made this statement: 

“The Central New England, as an independent line, had no legitimate function 
to perform. It was a hopeless proposition from the start, never earning the interest 
on its bonds, and often failing to earn its operating expenses. Its only possibility of 
continued existence lay in its connection with a strong established line which could 
foster and develop it.” 



86 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


[From the Springfield Republican, March 19,1908.] 

What the New Haven does: 

PROTEST OVER REDUCTION—ON THE CENTRAL NEW ENGLAND—ONLY ONE TRAIN EACH 
WAY—ACCORDING TO ORDERS JUST ISSUED—INTERFERENCE WITH SHOPPING AND 
FREIGHT. 

A storm of protest has been aroused over the announcement that, beginning to¬ 
morrow, there will be only one train a day on the Central New England between this 
city and Tariffville. After that date the train leaving this city daily, except Sunday, 
for Tariffville at 3.45 p. m. will be discontinued, as will the train leaving Hartford 
for Springfield and way stations at 9.55 a. m., while the train now leaving Springfield 
at 7.48 a. m. will leave at 7 a. m., and other stations correspondingly early. Four 
trains on the Rhinecliff branch will be discontinued between Millerton and Silver- 
nails. 

This change means that residents of places on the Central New England between 
this city and Tariffville will be unable to stop here, because the only train to this 
city will arrive at 6.55 p. m., after the stores are closed, while the only train out of 
this city will be the one that leaves at 7 a. m. Accordingly petitions will be circu¬ 
lated among residents of Tariffville, Feeding Hills, East Granby, West Suffield, and 
business men of this city, asking that the road continue the service as at present. 
As the passenger trains are also the freights, there will be serious interference with 
shipping and receiving of goods all along the line. A delay of 24 hours in delivery of 
mails is among the disadyantages of the change, for the mails from the north arrive 
at 7 15 a. m., while mails from Boston and New York arrive so near 7 o’clock that 
the slightest delay would cause them to miss the Central New England connection. 
Even if the mails be sent to Hartford, and then be sent up the line from that city, 
there will be a delay of at least 12 hours. 


Following is copy of resolutions passed by the Rockland Central Labor Union: 

Rockland, Mass., April 7, 1908. 

Whereas we believe that the people of this Commonwealth are entitled to the most 
efficient service, and the lowest cost of transportation from the railroads; and 
Whereas they are assured of this only when there is a reasonable competition between 
railroads such as now exists; and 

Whereas a consolidation of the two big systems would result in a complete monopoly 
most destructive to their progress: Therefore be it 

Resolved , That this body use every reputable method against the legislation of the 
proposed merger; and be it 

Further resolved , That a copy of these resolutions be sent to our Representative and 
Senator. 

Abraham Lelyveld, Secretary. 


The Hampden County Traffic Association, Massachusetts, 

Chicopee , Mass., June 7, 1909. 

Whereas a so-called “governor’s holding bill” has been presented to the house and 
senate of the State of Massachusetts for enactment; and 
Whereas the so-called “governor’s holding bill” will not, in our judgment, best con¬ 
serve the producing, consuming, and public interests of the State or New England: 
Therefore, be it 

Resolved by this, the Hampden County Traffic Association of Massachusetts, in regular 
meeting, That we are unalterably opposed to any form of bill or legislation, holding 
or otherwise, that will permit or authorize the domination, control, or operation of 
the Boston & Maine Railroad by the New York, New Haven & Hartford Railroad Co. 

Be it further resolved, That if some form of legislation be found necessary to protect 
the interests of the State then such bill before enactment shall bear such provisions 
and safeguards as shall forever prevent a possible merger or its equivalent of the Boston 
& Maine Railroad and the New York, New Haven & Hartford Railroad Co. 

Be it further resolved, That only by the continuance of the active competition here¬ 
tofore and now existing between these two great systems can the best interests of the 
State be assured. 

The Hampden County Traffic Association. 

F. R. Lyman, Secretary Executive Committee. 




N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 87 


HAMPDEN COUNTY TRAFFIC ASSOCIATION—LIST OF MEMBERS, MAY 29, 1909. 

Jas. F. Carraher, J. Stevens Arms & Tool Co., Chicopee Falls; W. P. Prickett, Barney 
A Barry, Springfield; W. L. Haskell, Stevens-Duryea Co., Chicopee Falls; P. J Dowd 
Powers Paper Co., Holyoke; F. R, Lyman, Fisk Rubber Co., Chicopee Falls; Geo L 
Rodmr, Mittineague Paper Co., Mittmeague; Edw. T. Newton, Chemical Paper Co., 
Holyoke; A. R. Root, American Pad & Paper Co., Holyoke; L. J. Howard, Lamb 
Knitting Co., Chicopee Falls; E. B. Cooley, Parsons Paper Co., Holyoke; W. S. L. 
Hawkins, Fisk Manufacturing Co., Springfield; Andrew Gale, Belcher <k Taylor Co., 
Chicopee Falls; J. H. Morrow, A. G. Spaulding & Bros., 126 Nassau Street, New York 
City; A. L. Appleton, Baush Machine Tool Co., Brightwood; C. A. Edgerton, South- 
worth Paper Co., Mittineague; G. H. Powers, Holyoke Card & Paper Co., Springfield; 
L. E. Fay, White & Wyckoff, Holyoke; National Blank Book Co., Holyoke; L. M 
Yoerg, Carew Mfg. Co., South Hadley Falls; W. C. Reynolds, 'JTie Taylor Burt Co., 
Holyoke; Geo. H. Trabold, Hampshire Paper Co., South Hadley Falls; W. B. Bell, 
Brooks Bank Note Co., Springfield; Thos. L. Hisgon, Four Bros. Independent Oil 
Co., West Springfield; D. L. Shea, Springfield Brewing Co., Springfield; Geo. L. 
Gray, M. H. Barnett, Springfield; Geo. H. Sharp, Independent Whip Co., Westfield; 
W. F. Foley, T. Shea, Springfield; H. C. Shaw, Hendee Mfg. Co., Springfield; Essex 
Pad & Paper Co., Holyoke; Thos. W. Harrington, Crocker, McElwain Co., Holyoke; 
Geo. E. Whipple, U. S. Whip Co., Westfield; H. T. Whitehouse, Judd Paper Co., 
Holyoke; C. H. Tenney, Springfield Gas Light Co., Springfield; D. K. Brown, 
Woronoco Paper Co., Woronoco; Chas. 0. Beach, Knox Auto Co., Springfield; Theo. 
R. Geisel, Liberty Brewing Co., Springfield; H. N. Clark, West Box Co., Springfield; 
Chas. A. Buckley, Ames Sword Co., Chicopee; Loring Axtell Co., Springfield, Mass.; 
E. Beebe, N. E. Supply Co., Holyoke. 

Now, Mr. Chairman, I suppose these letters are competent, they 
being signed by the President of the United States. 


Exhibit A. 

April 3, 1912. 

The Hon. William H. Taft, President of the United States , 

White House , Washington, D. C. 

My Dear Mr. President: The last time I talked with you was at the house of 
Mr. Joseph Walker, Brookline, Mass., then speaker of the house of representatives. 

Since that time railroad conditions in New England have become more and more 
acute and worse than ever. The United States suit started by Roosevelt and dropped 
by Wickersham has left us in the hands of a complete monopoly in railroad transpor¬ 
tation through a holding device known as the Boston Railroad Holding Co. Mr. Wick¬ 
ersham dropped the suit immediately after the holding bill just mentioned had passed. 

In the United States suit nothing was mentioned regarding the steamers owned by 
the New York, New Haven & Hartford Railroad, paralleling the rails between Port¬ 
land and New York and every important city; from Bridgeport to New York, New 
Haven to New York, New London to New York, Providence to New York, and Bos¬ 
ton to New York. 

There is a bill now pending called the Panama Canal bill, reported to the House by 
the Committee on Interstatee and Foreign Commerce, which would prevent this situa¬ 
tion. Our merchants and our boards of trades are absolutely opposed to being forced 
to pay equal rates by one monopoly on the land and sea. Every independent steam¬ 
ship line which has been started to give us relief has been crushed out of existence 
by competition by various so-called independent lines owned and controlled by the 
New Haven. 

As a lifelong Republican and as an exchairman of the ways and means committee of 
the State, and a recent candidate for governor of Massachusetts, I beg you to assist us 
in giving us the necessary relief. The Sherman Act protects us but lack of its enforce¬ 
ment and lack of procedure has placed New England in a helpless position. 

If the bill now pending, mentioned above, fathered by Representative Covington, 
of Maryland, should become law it would, doubtless, assist us, but it seems to me that 
the way to obtain relief is to enforce the Sherman law and see to it that Mr. Wicker¬ 
sham investigates this situation. 

I appreciate the tremendous burdens and labors under which you are now staggering 
and I hesitate to write you, but this situation in New England is of vital importance 
and is a festering sore in the minds of our shippers, merchants, and business men, as 
well as the traveling public. It is a situation which should be dealt with immedi¬ 
ately. 

Our State laws have been broken as outlined by the unanimous decision of the 
Supreme Court of Massachusetts. Our United States’ laws have been broken, and a 


88 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

suit started by the United States has been—for no good reason—dropped. It is this 
kind of thing which has created so many so-called Progressives and has deflected from 
the Republican party so many good men. It is this kind of thing which goes without 
notice that causes unrest throughout our country. 

In closing I would say that there is scarcely a citizen of New England that does not 
realize the above facts, and I ask you as the Chief Executive to see to it that the 
Attorney General’s Department take notice of the monopoly in question and see to 
it that we are given relief. 

Yours, very truly, 


Exhibit B. 


The White House, 

Washington , April 5, 1912. 

My Dear Mr. White: I have yours of April 3. The suit which was dropped by 
Mr. Wickersham was dropped because there was no ground for its upholding, and the 
one thing I do not propose to do is to prosecute where there is no ground. I was so 
advised by Mr. Wickersham. 

The only ground for the suit was that the two systems of railroad were so competitive 
that the acquisition of one by the other constituted a direct, undue restraint on inter¬ 
state commerce. The facts were that while here and there certain-short bits of lines 
were more or less competitive, particularly a few lines of trolley road, the systems 
were supplementary to each other and not competitive, and there was no reasonable 
ground to anticipate a court holding that the purchase of one by the other amounted 
to an unlawful restraint of trade. Our experience in the merger suit against the Union 
Pacific and Southern Pacific indicates how clear must be the proof of direct restraint 
of interstate commerce to secure a favorable judgment from the courts. 

The reason why the steamers owned by the New York, New Haven & Hartford 
Railroad were not made part of that suit was because Mr. Roosevelt had expressly 
permitted their purchase by the New York & New Haven Road, as I understand it, 
and this was not included in the bill upon which we were called upon to decide 
whether or not we should continue the prosecution. Mr. Wickersham has already 
investigated this matter, and you are entirely wrong in saying it was not dropped 
for a good reason. The trouble about the gentlemen you speak of, who class them¬ 
selves as progressives, is that they do not learn all the facts before they reach con¬ 
clusions. 

I have transmitted this letter to Mr. Wickersham for correction before it is forwarded 
to you. 

Sincerely, yours, 

Wm. II. Taft. 


Norman H. White, Esq., 

15 Beacon Street, Boston, Mass. 


The President very kindly wrote to me on April 5, 1912, over his own 
signature, dated “The White House, Washington, April 5, 1912.” 

My Dear Mr. White : 1 have yours of April 3. The suit which was dropped by Mr. 
Wickersham was dropped because there was no ground for its upholding, and the one 
thing I do not propose to do is to prosecute where there is no giound. I was so advised 
by Mr. Wickersham. 

The only ground for the suit was that the two systems of railroad were so com¬ 
petitive that the acquisition of one by the other constituted a direct, undue restraint 
on interstate commerce. 

He does not say a word about steamers. 

The facts were that while here and there certain short bits of lines were more or 
less competitive, particularly a few lines of trolley road, the systems were supple¬ 
mentary to each other and not competitive— 

Mr. Chairman, steamers parallel the rail. I should think there 
would be an element of competition there. 

and there was no reasonable ground to anticipate a court holding that the purchase of 
one by the other amounted to an unlawful restraint of trade. Our experience in the 
merger suit against the Union Pacific and Southern Pacific indicates how clear must 
be the proof of direct restraint of interstate commerce to secure a favorable judgment 
from the courts. 




. N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 89 

The reason why the steamers owned by the New York, New Haven & Hartford 
Railroad were not made a part of that suit was because Mr. Roosevelt had expressly 
permitted their purchase by the New York & New Haven Road, as I understand it— 

Personally I think the President is wrong in that assertion. 

and this was not included in the bill upon which we were called upon to decide whether 
or not we should continue the prosecution. Mr. Wickersham has already investigated 
this matter, and you are entirely wrong in saying it was not dropped for a good reason. 
The trouble about the gentlemen you speak of, who class themselves as progressives, 
is that they do not learn all the facts before they reach conclusions. 

Well, I do not know, Mr. Chairman; I simply refer you to the 
result of the election. 

I have transmitted this letter to Mr. Wickersham for correction before it is for¬ 
warded to you. 

Sincerely, yours, 

Wm. H. Tapt. 

Norman H. White, Esq., 

15 Beacon Street, Boston, Mass. 

Therefore, I say, Mr. Chairman, that Mr. Wickersham, who dropped 
the suit when this letter was written, April 3, had already made up 
his mind not to do any act, because he virtually instructed the Presi¬ 
dent to write me as he has here, over his own signature. 

Mr. Hardwick. You said you were satisfied personally that Mr. 
Taft was mistaken when he said the trolleys and steamers were not 
in this prosecution because Mr. Roosevelt had authorized their acqui¬ 
sition by this system, and therefore could not prosecute for it. Will 
you give your reason for making that comment as you went along ? 

Mr. White. First, because as I understand the matter, the steamers 
on the sea at that time did not constitute a sufficiently complete num¬ 
ber to put them in and win the case on. 

Mr. Hardwick. But that was not his statement. His statement 
was that Mr. Roosevelt had authorized their acquisition, was it not ? 

Mr. White. I can only give you my answer to that question on 
hearsay evidence. 

Mr. "Hardwick. I should like to hear it. 

Mr. White. I should like to simply express my own views, without 
any further backing up on that point. If you wish to know my views, 
I have a great deal of confidence in Mr. Roosevelt, and when he tried 
to sue anything he tried to put in everything he could, and I can not 
conceive of how he gave instructions such as that as to the steamers 
owned by the New York, New Haven & Hartford Railroad. 

Mr. Hardwick. That is a matter of opinion alone, is it not ? 

Mr. White. That is a matter of opinion. 

Mr. Hardwick. The President may have evidence? 

Mr. White. He may have the entire evidence. 

The Chairman. What about the Pennsylvania coal law? 

Mr. White. Mr. Chairman, to continue, on April 8,1912,1 answered 
Mr. Taft as follows: 

Exhibit C. 

April 8, 1912. 

The Hon. William H. Taft, 

President of the United States. 

White House , Washington , D. C. 

My Dear Mr. President: I have your esteemed favor of April 5 in re New York, 
New Haven & Hartford Railroad, and thank you very much for your reply. 

I, of course, am not familiar with the facts as to whether Mr. Roosevelt permitted 
the’purchase of steamers which parallel the New Haven’s lines to New York between 
Portland and New York and all intermediate points, but I do say this: That whether 


90 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

or not Mr. Roosevelt permitted their purchase, the purchase is a fact and the issue 
is direct and clear. 

Eliminating entirely the situation on land, which you contend is debatable and 
which I say is not, the steamers on the sea paralleling in every instance the railroad 
is directly obnoxious and contrary to the Sherman Act beyond question. 

You and Mr. Wickersham have been in office sufficiently long to take up this 
matter, and the fact as to whether or not the steamers were in the original suit has 
little to do with the present illegal situation. I can not think that either your or 
Mr. Wickersham dispute my contention so far as steamers are concerned, regardless 
of trolleys and railroads in New England. On the other hand, it seems to me unusual 
and not good public policy to have one Attorney General under one President press a 
suit vigorously for more than a year and then have another President and Attorney Gen¬ 
eral drop the suit at the very time when there is a crisis in Massachusetts; in fact, the 
information that Mr. Wickersham would drop the suit was used as the chief cudgel 
In debate and before committee hearings to pass the Boston Railroad holding device 
which is so much disliked throughout the length and breadth of New England. 

Again I ask to be pardoned for trespassing on your more than valuable time, but 
I can assure you that I would be most grateful to hear from you or Mr. Wickersham 
concerning this whole matter, particularly concerning both your and his views regard¬ 
ing the ownership of steamers which openly and defiantly parallel our railroad system 
and destroy competition on land aqd sea between New York City and New England. 

Yours, sincerely, 


I am still waiting for a reply to that letter. 

Mr. Lenroot. In that connection, did you understand that at the 
time the Attorney General ordered the dismissal of this suit he made 
the statement giving his reasons for it ? 

Mr. White. I can not trace that definitely, except in this way: 
That at a hearing before the railroad committee it was stated that if 
this holding device was passed that the United States suit would be 
dropped, and Gov. Draper told me that he had every reason to believe 
that if his holding device bill was passed that the United States suit 
would be dropped, and the fact was that after the holding bill was 
passed the United States suit was dropped. 

Mr. Lenroot. I notice in this document you have referred to the 
committee, to what purports to be quoted, a statement of the Attor¬ 
ney General, and I did not know whether you knew whether it was 
authentic or not. 

Mr. White. I do not know. 

Mr. Lenroot. If it is, I suggest you put it in the record in con¬ 
nection with what you have just read. 

Mr. White. I remember this. It was the Department of Justice 
stopped the suit. 

Mr. Lenroot. Yes. 

Mr. White. I should like to have that put in the record; in fact, 
I would like this whole thing put in the record, if it is not too long. 

The Chairman. It is already printed in the Congressional Record, 
and I hardly think it is necessary to repeat it. 

Mr. White. Then in this special record I should like to have this 
inserted. 

The Chairman. There is no objection to that extract. 

Mr. White (reading): 

The Attorney General to-day directed the dismissal of the Government’s suit 
against the New Haven and the Boston & Maine Railroad and others for violating the 
antitrust law, issuing a statement in which he says: 

“The Attorney General received to-day a certified copy of the act passed by the 
Legislature of Massachusetts and approved last Friday.by the governor of that State 
creating the Boston Railroad Holding Co. This act authorizes the new corporation 
created under it to acquire and hold all or any part of the stock and bonds of the 




N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 91 


Boston & Maine Railroad Co., and further authorizes any railroad company thereto¬ 
fore incorporated under the laws of Massachusetts to acquire and hold the stock and 
bonds of the Boston Holding Co. 

“In view of the fact that the suit of the United States now pending against the New 
Haven and Boston & Maine Railroad companies for a violation of the antitrust act 
rests almost entirely upon a claim that these companies had already consolidated by 
means of stock ownership, and since the community most directly affected is the State of 
Massachusetts , whose laws now expressly authorize such consolidation , the Attorney General 
has determined to dismiss the Government’s action. 

“In that action the further complaint was made that the New Haven road had 
acquired a number of trolley lines in Massachusetts and adjoining States* and that 
this was a combination in restraint of interstate commerce. Since the Government’s 
suit was determined upon, however, the Supreme Judicial Court of Massachusetts, 
in a case involving the right of the New Haven road to acquire trolley properties in 
Massachusetts, has decided that the railroad company has no such power, and that 
company has been parting with such trolley properties. Upon this question theAttomey 
General is convinced that whatever may have been the merit of the claim when the 
suit was begun , there is not now in this case any such element of competition in interstate 
commerce by reason of such ownership of trolley lines as would justify such a further 
prosecution of the action.” 

The Attorney General has directed that the case be dismissed at once. 

By 1908 the New Haven Railroad had acquired 1,500 trolley lines, 
practically all Connecticut trollys, practically all the Rhode Island 
and nearly 600 miles of trolleys in Massachusetts. They had the 
Bridgeport line, the New England line, the Hartford line, the New 
England to Portland, the Boston to Philadelphia; they had the con¬ 
trol of the Merchants & Miners Transportation Co., which runs from 
Boston to Philadelphia, also the line from Boston to Norfolk; the 
Stonington line, the Joy line, and the Fall River line. 

Mr. Chairman, we have citizens in Massachusetts who would show 
you in an intricate but perfectly clear manner how the New Haven 
road set out to crush any independent steamship line. I have heard 
the story from an eminent citizen of Massachusetts a great many 
times, and if this investigation goes on I am sure Mr. Louis D. Bran- 
deis would give you very excellent and interesting information on 
that point. The same smile, Mr. Chairman, was given by the New 
Haven directors when it was called to their attention that they were 
breaking the law of Massachusetts; it could not be. I simply wish 
to call attention, to the fact that they were. I also wish to suggest, 
and to have placed in the record, because it is a short statement, a 
speech Louis D. Brandeis delivered February 11, 1908, before the 
New England Drygoods Association on this question, which outlined 
at that time what has happened in New England. 

Now, Mr. Chairman, at one time, after the trolleys were given up, 
we had a peculiar situation; the supreme court held the trolleys to be 

f iven up directly or indirectly. I do not want to go through this, 
ut I should like to leave this for your consideration, showing the 
trolleys as they are held. This shows the ownership of the trolleys 
after the supreme court had ordered them given up. 

Mr. Pou. Will you pardon me for a moment? This matter con¬ 
cerning the trolleys was a matter that could have been dealt with 
by the State of Massachusetts? 

Mr. White. Both by the State and National Government. They 
were interstate trolleys. 

Mr. Pou. They were interstate trolleys, were they ? 

Mr. White. They were all embodied in the suit. Those trolleys 
are all embodied in the original suit. The Berkshire Street Railway 


92 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Co. owned or controlled 16,288 shares. I do not know how they are 
held now, but in 1910 it was held by the New England Investment 
& Security Co., in this manner: The New England Investment & 
Security Co., in turn, being held by 1,000 shares of common stock, 
100 shares in the hands of Mr. James B. Brady, 200 shares bv Mr. 
R. S. Clark, 150 shares by Mr. L. E. Harmes, 250 shares by S. Hem¬ 
ingway, 100 shares by Mr. H. L. Higginson, one of the brokers who 
put the Boston & New Haven Railroad through, and 100 shares by 
Mr. E. D. Redfield, and 100 shares by Mr. D. G. Wing, president of 
the First National Bank. 

Those 1,000 shares of common stock of this New England Security 
Co. controlled the New England Investment & Security Co., and the 
New England Investment & Security Co. owned the Berkshire Street 
Railway Co., having 16,281 shares, of which L. Candee held 1 share, 
Henry W. Ely 1 share, Ralph D. Gillett 1 share, J. T. Harmer 1 
share, Clinton J. Richmond 1 share, L. S. Storrs 1 share, and Bentley 
W. Warren 1 share; Mr. Warren, I think, was counsel for the New 
Haven Railroad, but out of 16,289 shares the New England Invest¬ 
ment & Security Co. controlled 16,281 shares, and so on, Mr. Chair¬ 
man, down the line with these various trolleys. How those shares 
have been shifted since that time I do not know, but I believe that 
this committee will be able to show conclusively and effectually that 
the interest of those trolleys is still held by the New Haven road, 
contrary to the unanimous decision of the Supreme Court of Massa¬ 
chusetts. 

Now, Mr. Chairman, while Providence has had her trouble with 
the Grand Trunk we in Boston believe that the Grand Trunk was a 
great relief, or one of the methods of relief which we might receive, 
and I have here statements from our railroad committee showing the 
kind of citizens that appeared before the Massachusetts Legislature 
in regard to the Grand Trunk bill, and their statements in digest 
form in print. They are as follows: Hon. John F. Fitzgerald, mayor 
of Boston; John J. Attridge, of the Boston city council: W. S. Schus¬ 
ter, of the governor’s council; R. S. Bauer, of the Essex County 
Board of Trade; Norman II. White, of Brookline; D. F. Lawrence, 
general freight agent of the Central Vermont Railroad; E. H. 
Vaughan, city solicitor of Worcester, Mass. : H. H. O’Rourke, aider- 
man of Worcester, Mass.; Hon. William S. McNary, port of Boston 
director and former United States Congressman from Massachusetts; 
Charles T. Tatman, of Worcester, Mass.: A. M. Child, secretary Haver¬ 
hill, Mass., Board of Trade; Thomas H. Shepard of Boston, for the 
export lumber trade; Andrew A. Casassa, chairman of the board of 
selectmen of Revere; Hon. Eben S. Stevens, representing the Busi¬ 
ness Men’s Association of Webster and Dudley; Robert C. King, 
member of the Lhiited States Leather Co. and member of the cham¬ 
ber of commerce: Alexis P. Boyer, jr., chairman of the board of 
selectmen of Southbridge and representing the Board of Trade and 
Commercial Club of Southbridge. 

We had a most representative and influential body of men appear¬ 
ing in favor of the Grand Trunk coming to Boston. The Grand 
Trunk bill, passed by the Massachusetts Legislature last year, was a 
generous and a liberal one. 

I can not speak of my own knowledge as to why the Grand Trunk 
project was stopped, but I do say that the Grand Trunk would give 


N. Y my N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 93 

us a very seasonable relief. Aside from the relief, Mr. Chairman, if 
you will view New England geographically you will find we are 
shoved up into the northeastern corner of the continent. Our port of 
Boston is nearer to the port of Liverpool than any other port in the 
northeast, except Portland, which is nearer Liverpool than Boston 
is by about 50 miles. 

I do not wish to burden the committee, but I have here various 
documents which will show the business that New England has with 
Canada. Briefly, Mr Chairman, the Canadian traffic pours down 
through the Lorenson Valley, and from Montreal it goes through 
from Halifax and St. John below from Montreal. Halifax is some 700 
miles over the Intercolonial road, I think, and Boston is the most 
logical, reasonable, and the nearest point for that great traffic of 
Canada, and of the great undeveloped Northwest, to come down and 
dump their freight into Boston. I have a statement on that which 
would take a very great while to read and would trespass on the time 
of the committee. 

The Chairman. We have a number of gentlemen who wish to be 
heard, and if you desire to insert the statement, and it is a part of 
your argument, the committee will have no objection to it, if it bears 
on the question of competition and this commerce you speak of com¬ 
ing from Canada down into New England if the new road were built. 
Does it bear on that subject? 

Mr. White. Absolutely, in miles and grades from city to city. 

The Chairman. I see no objection to it being inserted in the record. 

Exhibit Z. 

THE DELIVERY OF NEW ENGLAND’S TRANSPORTATION TO A GIGANTIC MONOPOLY- 
HOW IT WAS ACCOMPLISHED AND POSSIBLE REMEDIES. 

At the time of the organization of the New York, New Haven & Hartford Railroad 
way back in the year 1872, our citizens will remember that New England had many 
independent steam railroads, doing both an interstate and an intrastate business. 
One after another, either by lease or purchase, these independent lines were acquired, 
until in the year 1904 New England found herself in the hands of three big sty terns, 
each controlled and operated independently. 

The New Haven road had its main line to New York and operated more than 2,000 
miles of rails in Connecticut and Rhode Island. 

The Boston & Maine road, running to Boston and Portland, also extended its lines 
into Maine, New Hampshire, Vermont, and northern and western Massachusetts, 
operating about 2,300 miles of road. 

The Boston & Albany, some 304 miles long, ran through central Massachusetts 
westward to New York State. These were the three systems which gave New England, 
and particularly Massachusetts and the port of Boston, three strong and competing 
lines to the Great West. All of these roads were of tremendous value and importance 
to our commerce and trade. There was no demand for further consolidation either 
by our shippers or our traveling public. The New Haven and the Boston & Maine 
were competitors for business in our principal cities and many of our towns such as 
Boston, Lowell, Fitchburg, Marlboro, Worcester, Springfield, Holyoke, and North¬ 
ampton, and more than 20 other places of greater or lesser importance. But the New 
Haven was not satisfied with this situation and decided to create a complete monopoly 
of transportation throughout the length and breadth of the New England States. 
From the first the New Haven had been carrying on a most aggressive campaign to 
control the transportation of New England, and by the year 1904 had succeeded by 
many devious methods in acquiring all the steam railroads in the State of Connecticut 
except 58 miles, all the steam railroads in Rhode Island except 25 miles, and all the 
steam railroads in Massachusetts except the Boston & Maine, the Boston & Albany, 
the New London & Northern (Grand Trunk), and some five or six local lines. 

About 1892 electric interurban trolley roads began to be developed in New. England 
and these roads soon became a new and important factor in interstate and intrastate 


94 N. 1\, N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

business. Most of our important cities and towns, particularly in southern New 
England, felt the commercial value and the relief given by these interurban electric 

systems. TT , . . 10ft0 

In the annual report of the stockholders of the New Haven road in the year lo9u 
we find the following statement: “The rapid application of electricity as a motive 
power upon the highways brings attention of railroad managers to the competition 
thereby created with existing steam roads.’’ 

Again in 1901 the New Haven, by a vote of its directors, authorized a committee 
composed of Messrs. Taft and Brush “to consider and act with full powers as to the 
plans for uniting into one system, operated by a corporation to be controlled by this 
company (New Haven), certain lines of electric railway constructed and about to be 
constructed.” Acting under these instructions the above committee did not wait 
long. It is of more than passing interest to see how the huge New Haven obtained 
trolley acquisitions. 

The committee at once formed a corporation known as the Worcester & Connecticut 
Eastern Railroad, and the New Haven Railroad “advanced from time to time under 
the direction of the committee funds for the construction and extension of the lines, 
and bonds were issued and the various lines so extended and connected * * *. 
The company has received and now holds a majority of the stock of the Worcester & 
Connecticut Eastern road, to wit, 2,501 shares, which gives the company (New Haven) 
control of the property.” This quotation is taken from the report of the committee 
in October, 1903, and'this may be called the first step in the trolley monopoly. The 
next year, in 1904, the New Haven obtained a decree to change the name of this new 
trolley company to the Consolidated Railway Co., and it immediately increased the 
capital of the company from one half a million dollars to ten million dollars. Money 
to do business to be paid by the public was necessary, this was the second step. Of 
course the New Haven owned and controlled the stock and elected the officers and 
directors, all of whom were New Haven directors. 

The trolley campaign now went merrily on. It was decided to control the inter¬ 
urban of New England. One by one, by any means whatsoever, they all fell into 
the lap of the New Haven control. Competition mentioned in the annual report 
must cease. So stealthily and steadfastly one by one the Connecticut trolleys were 
taken over and hand in hand with this the Consolidated Railway Co. issued bonds to 
pay for them while the New Haven road guaranteed interest as the merging was going 
on day after day. Thus, briefly, by May 31, 1907, the New Haven had gobbled up 
more than 500 miles of the 600 miles of trolleys in Connecticut, and for a while, in view 
of public protest in that State, the New Haven rested. 

While this was going on a new corporation was born in Rhode Island, known as the 
Rhode Island Co., and strangely enough it had the corporate powers to unite under a 
single management the gas, electric light, and street-railway business of Providence, 
and also to control the principal urban and interurban electric lines. 

This was the beginning of the trolley campaign in Rhode Island. This corporation 
could not do the thing alone successfully, so the New Haven organized the Rhode 
Island Securities Co., a brand new New Jersey corporation, and this friend from 
New Jersey immediately acquired the stock interest of the recently created Rhode 
Island Co. Four years later, in 1907, in order to completely suppress competition in 
Rhode Island trolleys, the New Haven obtained a decree changing the name of the 
company known as the New England Loan and Trust Co. to the Providence Securities 
Co., with a baby capital of $50,000. The New Haven owned all of this $50,000 worth 
of stock. This bright little Providence Securities Co. had a splendid charter, created 
especially for New Haven purposes; i. e., to “buy and sell all kinds of securities, to 
act as trustee, or as a financial or other agent for any corporation and in their behalf 
to issue registered and countersigned certificates of stock, bonds, and other evidences 
of indebtedness.” Here was another instrument for the Rhode Island campaign. 

What happened? The Providence Securities Co. with its $50,000 worth of capital 
immediately issued $20,000,000 worth of 4 per cent, 50-year bonds and goes forth to 
sell these bonds and then purchased the securities of the Rhode Island Securities Co., 
which in turn controlled the much-desired gas, electric light and street railways of 
Providence and the principal urban and interurban lines of Rhode Island. After 
this was done the Rhode Island Securities Co. was dissolved. 

Business in Connecticut during this time had not been particularly lagging, for the 
Consolidated Railway Co. had incidentally picked up the entire capital stock of 
$500,000 of the New York & Stamford Railroad, running from Point Chester to New 
Rochelle, N. Y., and connecting up with the Connecticut monopoly. Rhode Island 
and Connecticut awoke to find themselves completely in the hands of one transpor¬ 
tation system. Having made a conquest of two of our New England States with its 
relentless methods, the New Haven turned its attention to Massachusetts. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 95 


The New Haven knew that her laws were hard and fast. The officers of the company 
immediately sought the advice of eminent counsel and after receiving such advice 
they made up their minds that they would take a chance, and proceeded on their 
campaign to buy Massachusetts trolleys contrary to the laws of the State. Our laws 
stated distinctly and clearly that no transportation company could buy the stock of 
any other corporation without first obtaining legislative permission. What regard 
was paid to this law we shall see. We shall also see what promises were made and 
what promises were broken, and we shall see clearly the delivery of Massachusetts 
step by step. 

Besides the law which stated clearly that no company could buy stock in any other 
without legislative permission, there was also an equally clear law which said that no 
transportation company should guarantee the debts of any other company without a 
similar permission. Both of these laws were created to protect the public, to protect 
the stockholders, and to protect the investors in our savings institutions. Rhode 
Island afid Connecticut did not have such protection, but doubtless if they had had 
their laws would also have been broken. Our citizens who were interested in the 
proposed schemes of the New Haven were safe; no men or corporation would dare 
attempt to take over the Boston & Maine system or our trolleys, in defiance of Massa¬ 
chusetts law. We felt sure that our interurban could not be bought against our will, 
and that the Boston & Maine Railroad, one of the three big systems, could not be 
purchased without permission. Our savings banks, the best and proudest in the 
world, could not buy securities of railroads unless they had paid adequate dividends 
for a reasonable period of time. Massachusetts rested supposedly safe, secure, and 
people said that Connecticut might be delivered, but Massachusetts never. 

But with these laws staring them in the face, upon the advice of eminent counsel, 
quietly, one after another our electric lines, parallel and competing with the New 
Haven lines, were taken, and adding these takings they created a great network 
of trolleys more than 500 miles in length. Public indignation, little by little, became 
aroused, especially when, in 1905, a peculiar chain of circumstances brought the 
matter to public attention. In 1905 the Boston & Maine Railroad felt the oppression 
of the New Haven trolleys, thus taken against the law. These trolleys competed with 
the Boston & Maine system, and immediately the Boston & Maine road went to the 
legislature and asked permission that they might purchase trolleys legally. Then there 
occurred a most peculiar situation. The New Haven, with its lobby, backed by 
powerful interests, proceeded to kill the request of the Boston & Maine to buy trolleys 
legally, while the New Haven itself was buying them illegally, and this same lobby 
to-day is trying to kill the bill which will permit the entrance of the Grand Trunk 
system into Boston. 

The Boston & Maine’s request to buy trolleys was killed, and Gov. Guild, as a result, 
on June 23, 1906, sent the following message to the legislature: 

“I congratulate you on the defeat of a measure that would have sanctioned the 
possible consolidation of all transportation in Massachusetts under the control of a 
single corporation. The present railroad situation, however, is most unjust and 
inequitable. Our steam railroad system is forbidden to meet the competition of 
electric street car lines by purchase or control of their stock, but another, controlled by 
men who are not citizens of Massachusetts, is not only permitted to exercise that 
privilege, but is exerting it to-day to such an extent that healthy competition in 
western Massachusetts is already throttled. 

“Slowly, surely, the control of our own railroads, the control of the passage to 
market of every Massachusetts product, the control of the transportation to and from 
his work of every Massachusetts citizen is passing from our hands to those of aliens. 

“I therefore urge upon you with all the strength that is in me the passage of some 
legislation giving relief from this grave injustice. Let Massachusetts announce that 
transportation within her borders is in the future to be controlled by the people of 
Massachusetts, and not by men beyond the reach of her law and the inspiration of her 
ideals.” 

Public attention was now centered on the New Haven system, and little by little, 
facts began to leak out. Our citizens learned that 500 out of 600 miles of trolley had 
been taken contrary to law, and immediately the attorney general of the State began 
suit against the New Haven road. Mr. Mellen, president of the New Haven road, 
seemed at that time considerably disturbed over the situation then confronting him, 
and appearing before the legislature he urged that no hasty action should be taken 
and advised that the State should wait for the decision of the suit to be handed down 
from the Supreme Court of Massachusetts. He ordered Mr. Charles F. Choate, jr., 
the counsel for the New Haven road, to send the following letter to the Hon. Joseph 
Walker, then a member of the railroad committee. This letter was a solemn pledge 
given June 27, 1906, that the New Haven would not enter upon further acquisitions 
in Massachusetts until the trolley question had been settled. 


96 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Here is the letter: 

“June 27, 1906. 

“Representative Joseph Walker, Esq. 

“ My Dear Mr. Walker: I have communicated with Mr. Mellen by telephone and 
got from him the following: 

“‘Mr. Mellen authorized Mr. Choate to state to the legislature that they will not 
enter upon further acquisitions in Massachusetts, other than those already contracted 
for, or build any trolley lines excepting such as are now under actual construction, 
urt 1 such times as the merger question has been settled. Mr. Mellen is willing if 
the committee desires it, to furnish a list of properties already contracted for or under 
construction, to avoid any further misunderstanding.’ 

“Yours, truly, 

“Charles F. Choate, Jr.” 


The legislature adjourned. No hasty legislation occurred. The list mentioned was 
furnished. A truce existed; the State would wait. The attorney general was press¬ 
ing his suit. But to what avail were pledges when the complete monopoly was -to be 
created in spite of the pending suit, in spite of the written pledge, in spite of the 
warning received, in spite of the list given, the New Haven immediately purchased 
four more large trolley systems; and suddenly it was learned that the New Haven 
had planned a deliberate campaign to buy up the Boston & Maine road, and it did 
buy 40 per cent of the stock of its big rival? 

Where was the law? Where was the promise? Were they forgotten? Was the 
attorney general’s suit forgotten? Yes; all were forgotten, and Massachusetts had 
lost a big competitive system; she had been betrayed and her laws had been violated. 

The next year, in 1907, upon the return of the legislature, in order to appease the 
public of the State a sop was thrown to the public and a bill was passed which 
said that the New Haven shall not buy any more stock of the Boston & Maine until 
July 1, 1908. In May, 1908, when the next legislature was in session the much looked 
for decision from the supreme court was handed down. It was unanimously against 
the New Haven and they were ordered to give up their trolley holdings. Nothing 
was said about the Boston & Maine because this purchase was made while the trolley 
decision was pending. As soon as this decision was handed down the New Haven 
gave up its trolleys, putting them in the hands of the New England Investment & 
Securities Co., which was in turn controlled by the New Haven. It may be well 
in passing to note that on May 31,1907, the Consolidated Railway Co. of Connecticut 
merged itself in and with the New Haven Railroad of Connecticut; given back its 
old name and becoming then and there a new corporation with tremendous powers 
to own trolleys, gas, properties, water power, privileges, etc. 

Matters had become so acute in Massachusetts that the Federal Government pro¬ 
ceeded to interest itself, and in 1908 President Roosevelt ordered Attorney General 
Bonaparte to bring suit against the New Haven for violation of the Federal statutes. 
This suit under the Sherman antitrust law was vigorously prosecuted by the Roose¬ 
velt administration. Every effort was made by the New Haven for delay. The 
laws of Massachusetts were violated, the laws of the United States were broken, and 
besides the New Haven had purchased all the steamers in our coastwise trade be¬ 
tween Portland and New York and all intermediate points. Strangely enough the 
steamers were not mentioned in the United States suit although they clearly and 
directly parallel the lines of the New Haven. The suit begun by the Government 
May 28, 1908, was a petition signed by District Attorney Asa P. French, of Boston, 
Attorney General Bonaparte and Assistant District Attorney Purdy, in the case of 
the United States of America, complainant, against the New York, New Haven & 
Hartford Railroad Co., Boston & Maine Railroad, Consolidated Railway Co., and 
the Providence Securities Co., defendants. 

But even the suit of the United States Government pending did not seem to deter 
the New Haven from attempting to get the Massachusetts "Legislature to legalize 
its Boston & Maine holdings. In 1908 the New Haven tried to put through a bill 
which would give the road a legal title to the Boston & Maine stock, permitting the 
railroad commission to vote the stock for them. This bill, after a tremendous con¬ 
flict, was killed and the citizens of Massachusetts now were obliged to place an abiding 
faith in the laws of the United States and the enforcement thereof. 

This, briefly, was the railroad situation when President Taft came into office March 
4, 1909. Massachusetts was willing to let the United States Government take care 
of the Massachusetts situation under United States law, but suddenly during the 
legislative session of 1909 Gov. Draper sent to the legislature a special message asking 
for the creation of the Boston Railroad Holding Co., to which Mr. Mellen had agreed. 
Mr. Mellen had been several times in Washington and had several times consulted 
with Gov. Draper, and it was openly stated on the floor of the House that if this hold- 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 97 


1 i 11 " device was created the wheels of justice of the United States Government would 
cease pressing the New Haven suit. 

In spite of public protest the Boston Railroad Holding Co. became law allowing 
the New Haven to control the holding device, which in turn could buy at will all 
the stock, bonds, and debts of its rival, the Boston & Maine Railroad. The protests 
of boards of trades, merchants, labor organizations, were of no avail. The steam 
roller and political machinery of the party in power put through the Boston Railroad 
Holding Co. bill, giving the New Haven its much-sought-for opportunity to complete 
its purchases, contrary to the laws of the United States with the United States suit 
being vigorously pressed. Argument was of no avail, debate was not to be weighed 
in the balance, facts and conditions were worse than useless; orders had been given 
from sources high up that the Boston Railroad Holding Co. should become law, and 
thus Massachusetts delivered to the New Haven, as a reward of merit, its big com¬ 
petitor, the Boston & Maine. People could not believe their own ears. 

The holding bill became a law June 18, 1909, and the new Attorney General of the 
United States (Mr. Wickersham), without any good reason, dropped the United States 
suit on June 20, 1909. Massachusetts stood helpless, her laws broken, dominated by 
a monopoly on land and sea, uncontrollable and established contrary to the laws of 
our State and created while the Department of Justice at Washington was pressing its 
suit. Such a travesty of justice has never before besmirched the pages of Massachusetts 
historv. We had been delivered! Accordingly, all the shares of the Boston & Maine 
which had been secreted in Connecticut, held by J. L. Biliard, were now brought 
back with safety and dumped into the holding company, only to be added to by more 
shares.which the holding company immediately proceeded to buy. This is the story 
of v r hat happened to New England. 

The issue of more than seventy million dollars worth of stock of the New Haven, 
contrary to the laws of Massachusetts, was perhaps of less importance. In this case 
again the legislature came to the rescue and delegated its powers to a commission to 
validate these illegal securities. What is the situation to-day? The governor of,the 
Commonwelath has just recommended that the holding company be dissolved and 
that the New Haven take over the Boston & Maine direct. Gov. Draper was respon¬ 
sible for the creation of the holding company and Gov. Foss wall probably be respon¬ 
sible for the complete taking over directly of the Boston & Maine by the New Haven. 
Unable to earn its dividends, carrying a huge towering capitalization, indorsers for 
millions of obligations which do not concern steam railroads, an offender against our 
laws with permission in other States to go into many lines of human endeavor, we 
find knocking at our door with its great powder the New Haven, ready to take over 
the trolleys which the Supreme Court had made them give up, and also consummate 
complete taking over of the Boston & Maine Railroad. 

Bold, unflinching, the New Haven tells us: “We will kill the bill to allow the 
Grand Trunk to enter Boston. We have the complete field, monopoly is ours. W r e 
will allow no competition on land or sea; the Government of the United States is 
listless, and New England has been delivered to us for our development and our 
development alone.” 

Let us examine the Grand Trunk situation: 

The question whether or not the Grand Trunk Railroad shall enter the port of 
Boston is a question upon which largely depends our material welfare, our commercial 
business prosperity, and our future position in New England in the Nation. It is, per¬ 
haps, therefore, well, inasmuch as New England is such an important factor in the 
welfare of the Nation, to consider this subject, not only from a local, but a national 
standpoint . We must view the question to a marked degree from the viewpoint of our 
relations with Canada and the British Empire. We must consider our general British 
and Canadian trade relations. It is clear to the people of New England that it is a 
poor time to “split hairs.” Our relations in the past with one transportation 
monopoly do not warrant us now to “split hairs” with other transportation interests. 

It should be our purpose to say to another road desiring to enter Boston facing the 
monopoly in question, “We greet you with open arms and we shall be grateful for what 
increase in trade and commerce and competitive service you may bring us.” Instead 
of trying to find methods and wavs of injuring ourselves by defeating the entrance of a 
great railroad we should say, “We will be as liberal, at least, with you who ask to do 
things legally as we have been with those in the past who have broken our laws.” 
I say this especially in view of the fact that we are also in no position to forget the 
great Empire of which the Grand Trunk Railroad is a part, and, as stated above, we 
must not forget our great trade relations with the Dominion of Canada and the British 
Emnire at the present time. 

These reactionaries who in the public prints are calling these gentlemen who come 
before us “confidence men,” “press agents,” “promise makers,” “representatives 

72177—13-7 


98 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


of an octopus with 5,000 miles of tentacles,” and those who call the Grand Trunk a 
“little one-horse railroad” are but mouthpieces for the monopoly in whose grasp we 
find ourselves, and I maintain it ill becomes Massachusetts to make fun of these British 
business men who come before us at our own request, expressed by a unanimous desire 
of the Massachusetts Legislature. 

These gentlemen who would decry the Grand Trunk’s entrance forget or are ignorant 
or are actuated by selfish motives. Let us see some of our commercial relations with 
Canada and the Empire of which she is a part. Let us see if it is not necessary to 
stimulate and foster such relations by every legitimate means. This, I say, is a 
critical juncture with us. It is a time in our history, delicate and pregnant, and can 
not be lightly dealt with. I do not wish to antagonize or create prejudices, but I 
do wish to put forth some facts and figures so that they may not be longer ignored 
and will be fully recognized and acted upon for our own welfare and development. 

It seems to be the custom among certain of our people to decry anything British 
or Canadian. These attacks are coming now more than ever, instituted by a hostile 
press controlled or influenced by the railroad in our midst, with its many fingered 
hands on the very throat of our commerce, using its vast influence in our State and 
national politics, similar to the control in Connecticut and New Hampshire, using 
its influence on men high up in the machinery of both of our political parties. 

The fundamental question is whether we will listen to the voice of these gentle¬ 
men who have broken our laws, or whether we will act in favor of the majority of our 
population now held in a monopoly established against our will. Thus it is easy 
to account for the attitude of certain prominent journals. It is also easy to under¬ 
stand the degree of resentment which they have manifested. 

Canada is her own mistress; she is mistress of her own domestic politics. She 
decides for herself and she has the intelligence to decide. Her Government has an 
intimate supervision, in some cases almost the control, of her transportation lines, 
both by rail and by water. Shall we play the part of the fool when we are offered 
bread? Shall we listen to the influences mentioned or shall we listen to the voice 
of our commercial bodies, boards of trade, and the voice of last year’s legislature? 

We must remember the great Empire State of Ontario, we must remember New 
Brunswick, we must remember Manitoba and also that great undeveloped and 
resourceful country, British Columbia. We want connections and intimate rela¬ 
tions with this loyal, energetic and persistent Canadian Empire. We must not 
’ forget Canada’s great commercial situation and the countless millions from the mother 
country which are constantly pouring into this Dominion. We must not forget our 
opportunities and our future progress and. prosperity. We must attempt to revive 
those great mercantile and maritime pursuits which in years past made the brightest 
page in Boston’s commercial history, and make a supreme effort to ally forces as 
far as possible and reasonable with the Dominion of Canada and the British Empire. 

Let us see of what our trade with this Empire consists to-day. First, more than 
half of our entire export trade is with the British Empire, and this particularly 
applies to Boston. The great bulk of Boston’s export trade is to Great Britain and 
Ireland. The Dominion of Canada is now building up a great granary keystone 
and a world thoroughfare for the British Empire comprising one-third the population 
of the earth, in all of which we can share if we will. 

I do not hesitate to predict, basing such prediction on competent authorities, that 
the commerce of Canada with the United Kingdom, now more than $250,000,000 
annually, will, within 10 years, be more than 5 times that amount. This will be due 
fundamentally to the great increase in the export of Canadian products to British 
markets. We must not forget the enormous and increasing demands for grain and 
food made by Great Britain. We must, not forget the increasing demand for raw 
materials and crude manufactures, and we must not forget that more and more goods 
will be interchanged between the Dominion and the British Empire in the future. 
This trade and commerce we wish to have as much of as possible, and it should be 
our aim, especially in Massachusetts and New England, to handle and forward as 
large a share of the present and future traffic going and coming, as may be allowed. 
With anything like discreet and intelligent management our share can not help being 
of great and growing importance 

I maintain that the Dominion of Canada, actuated by the minds of shrewd engineers 
and capable financiers, has only begun to lay a vast foundation. They have been pre¬ 
paring a “plant,” and are backed up by Federal and provincial authorities to do more 
than could otherwise be expected of them. This line of human endeavor has gone 
into great and tremendous enterprises, including artificial waterways, the best in the 
world for transcontinental transportation. The Dominion is banded by steel rails, 
with trunk lines and local railways. It has improved its lakes and rivers and seaboard 
ports. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 99 


The Canadians have no fear in developing their tremendous plant, backed up with 
limitless natural wealth, with fields, forest, sea, and mines, and stimulated by great 
maritime and commercial opportunities, all of which lie knocking at their door. 
Would the great financiers of London, would the capitalists of Europe furnish hun¬ 
dreds of millions for these enterprises if they did not see in the future a huge possible 
development? Do they not see vast grain plains, only one-third of Canada; more 
than 150,000,000 of acres capable of producing 3,000,000,000 bushels of the best 
grain? They see the tens of thousands of agricultural immigrants, many of them 
pouring in over the boundary line of the United States, building up their homes 
to further create wealth and prosperity. We see this sister country or ours with these 
great advantages, following closely our example, building up a vast, rich, and free 
country upon our very borders. Is this of no interest to us? Shall we call these 
people visionary; shall we call their enterprises and railroads jokes? Is it good public 
policy for our press to laugh at the Grand Trunk lines, 5,000 miles long, with their 
arms extending in the lines of every known human endeavor? Shall we say, “We 
want no share of your trade, and you shall have none of ours”? “We would rather 
have you distinctly away from us; we are sufficient unto ourselves;” while we forget 
that the great bulk of our trade is already with the Empire which is fostering these 
enterprises in Canada, which in reality we ourselves are anxious to obtain and share. 

You will find in our State house selfish men, representing an institution created 
against our will and our law, who laugh at these suggestions, and will raise the cry 
that we want nothing of Canada and that the British Empire is of little consequence. 

In the year 1911 the United States trade with Canada reached the enormous sum of 
four hundred millions of dollars. Of this one hundred millions were imports; three 
hundred millions were exports. In 1909 our imports with Canada were eighty-seven 
millions and our exports one hundred and eighty-eight millions. In 1910 our im¬ 
ports were one hundred and three millions and our exports one hundred and eighty- 
eight millions. 

These are Government figures and might easily be increased, for they are most 
conservative. Thus, the people of Massachusetts will see that so far as a national 
proposition is concerned the United States can ill afford to allo.w Massachusetts to 
jeer at and make fun of our British neighbor. 

Besides this huge volume of trade there is what I am pleased to call invisible trade, 
which does not show; I mean goods carried to and from this country by individuals. 

Every now and then we hear some agitation to increase our trade with the west 
coast of South America and obtain a greater percentage there. Rather let us stimulate 
our trade with the Dominion of Canada and the British Empire, which is nearer and 
easier to reach, and whose products are as good and nearer than those of our South 
American friends. 

Let us, therefore, maintain a sensible attitude toward the Grand Trunk and the 
influences and people that are behind it. The quality of our exports to Canada in 
1911, the three hundred millions above mentioned, perhaps would be of interest to 
you. Two hundred millions were straight American manufactures, while the rest, 
one hundred millions, was for the most part products of our fields, mines, and forests, 
including fruits, berries, vegetables, grass seed, meats, provisions, eggs, oysters, fine 
lumbers, lumber, coal, cotton, and tobacco. Will the Legislature of Massachusetts 
forget these exports; will we try to find “slightest reasons” for attempting to prevent 
an increase in this trade? Do Boston and the State, which have both embarked 
upon a venture involving millions for our port, wish to prevent the entry of a road 
which will give us an easy and speedy route to increase our trade? I trust not, and 
I trust that these figures will mean something. 

But the New Haven road, for fear it might in some way meet with competition some¬ 
where, selfish to the last degree, powerful in our politics, having broken our laws, with 
astute attorneys and keen politicians backed up by machine influences and machine 
press, would cross these figures from your memory, that they, bearing the huge burden 
of a towering capitalization, might still be able to pay the dividends they have for years 
been unable to earn. 

I am a protectionist, but I have little patience with the high protectionists who for¬ 
get this huge balance of trade, $200,000,000 in the last year and $683,000,000 in the last 
10 years, with no sign whatsoever of diminution. This trade is with Canada alone. 
Neither have I any patience with those who forget our great trade with Great Britain, 
which is essentially part of this proposition, for Canada gets most of her money to pay 
this balance due us from the mother country. But Great Britain’s balance alone to us 
was $289,000,000 last year and more than three and one-half billions in the last 10 years, 
amounting from both countries to a sum almost incalculable. Again, going back to 
1890 to 1901, our balance during that period was $333,000,000, making the total 
balance since 1890 over a billion of dollars, and this huge sum Canada has paid us in 
cash, the most part of which is gotten from England. Our trade with the United 


100 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Kingdom from 1892 to 1901 was more than four billions of dollars paid in gold, which 
was the fundamental means of pulling us through the depression of the middle nineties. 
And yet with all these glaring truths we have in our midst intelligent sons of Massa¬ 
chusetts willfully ignoring them. 

We have the “standpatters” also, always ready to “twist the lion’s tail” “for reve¬ 
nue only,” or, more honestly speaking, for obtaining more tariff protection for their 
own pockets. These are the sons of Massachusetts who are sneering at the Grand 
Trunk Railroad. 

It is true that England is now in the throes of a political agitation. It is true that 
she is a free trade country; but, nevertheless, in the calendar year 1911 her total 
trade was considerably in excess of the year before of any in her history and amounted 
to <£1,138,000,000, more than $6,000,000,000, in total—her imports $3,318,000,000 
and her exports $2,715,000,000. Comparing these figures with the year 1903 we find 
that her exports in that year were only half in amount of the exports of last year. 
These figures speak for themselves. And this great increase both in exports and imports 
has occurred at the very moment of political and social agitation almost amounting at 
times to revolution. The reactionaries at this time prophesied that business would 
be ruined, at least “at home.” How flat this prophecy has fallen is shown by the 
increase just quoted. 

And now 1 come to our trade with the British Empire as a whole, which challenges 
the attention of every intelligent citizen and everyone who has regard for the prosper¬ 
ity of this country and this State, and it is shown that it is wise for us to make the best 
possible arrangements in transportation with a Dominion whicfi is fostered and engi¬ 
neered by the best financiers of the entire British Empire. 

The total trade of the United States for the year 1911, export and import, was more 
than $3,626,000,000. Our total business with the British Empire was $1,431,000,000. 
Our total exports for 1910 were $2,093,000,000, and to the British Empire they were 
$953,000,000. In 1909 our total foreign trade was $3,204,000,000; with the British 
Empire it was $1,247,000,000. Our total exports were $1,728,000,000, of which Great 
Britain took $790,0.00,000, or 47 per cent, in 1909 and more than 47 per cent in 1911. 
Going back to 1900 our total exports were $1,395,000,000; the British Empire took of 
this six hundred and seventy and one-half millions; this was about one-half 12 years 
ago, and thus you will see that with our trade with Great Britain, always the best half 
of our export trade, is constantly increasing in proportion to our trade growth. 

I have thus far attempted to show that our relations with Canada are such, both 
regarding exports and imports, that the Grand Trunk proposition should be considered 
seriously. I shall not attempt to show the almost universal public demand for the 
entrance of the Grand Trunk into Boston; but it is my firm belief, having discussed this 
question for at least a period of five years, that there is a universal demand from all 
men—the traveling public, merchants and shippers alike—to see that this road shall 
enter the port of Boston. 

Personally I would urge that the legal and public name of the New England por¬ 
tion’s name of the road consolidated with one line and corporation, as it ought to be, 
should he the Boston & Montreal Railroad. Every great line which has Boston for a 
metropolitan terminal must recognize Boston in its very name. We have lost prestige 
in railroad terminology. An outsider would naturally think that this big monogram 
that has gobbled up.New England’s transportation interests meant that Boston was 
a suburb of Hartford or New Haven. How long the Boston & Maine will be allowed 
to retain its name is even now a question. Boston & Providence; Boston, Concord 
& Montreal; Boston, Clinton & Fitchburg: these names are gone, to'what advantage 
to us? 

The Boston Holding Co., which gave the New Haven the Boston & Maine, made 
no requirements for electrification, although the president of the New Haven stated 
that he would start electrification within two years from the date of the passage of ' 
the Boston Railroad Holding Co. bill. 

I do not believe that Mr. Fitzhugh, who represents the Grand Trunk, desires to 
make any false pretenses or promises to our citizens, and it does not seem fair to me 
that in order to render us a great service he should be burdened at the start, with 
electrification in our suburban districts, such electrification being, in all probability, 
a tremendous burden and expense to the incoming road. 

There are 3,500 miles of the Grand Trunk Railroad lines which could feed Boston 
without in the slightest degree abrogating any contract which may exist with the 
(’anadian Government. The Grand Trunk is out for business, and we of New Eng¬ 
land are out for business. I have shown our enormous trade with Canada, and Tt 
seems to me that if we, if not stupid, can do more business with Canada, and we 
should hope to have as good service for that business as can be obtained, both in speed, 
number of trains, and in freight facilities. 1 believe that any proposition relating 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 101 


to improve, or new trolley or new steam railroads in Massachusetts will be attacked 
by the same gentlemen who are opposing the entry of the Grapd Trunk. Let us see 
a voucher for this statement. 

Let me read you a statement made by Mr. Frederick C. Dumaine, a member of 
the Boston Railroad Holding Co., before the joint railroad and transit commission, 
October 26, 1909. The statement I quote verbatim: 

“Mr. Chairman and gentlemen, I appear here as the representative of the Boston 
Railroad Holding Co. to protest against the Boston & Fiaston Railway Co. petition to 
tunnel Boston Harbor to connect with the North Shore. The holding company, as 
you know, was created by last year’s legislature for the purpose of controlling the 
railroad situation within the bounds of Massachusetts, and incidentally within New 
England. The holding company has proceeded in an orderly way to secure the 
majority of the stock of the Boston & Maine, and while it has not yet secured it, it 
has secured a working majority, etc. * * * It is the intention of the holding 
company to see to it that every point served by the Boston & Maine is adequately 
served, and we therefore pray you, gentlemen, that until we have demonstrated our 
inability or unwillingness to give such service you withhold the granting of this 
petition.” 

I maintain that the Boston & Maine has been in the control of the New Haven 
road for four years, long before the holding company was created, and instead of carry¬ 
ing out the agreement to increase facilities the Boston & Maine and the public have 
been “trimmed.” 

Particularly I would call your attention to this in the present situation in Fitch¬ 
burg. Also among other things the strangulation of the Boston, Clinton & Fitchburg 
road. I shall not try to state how many trains have been cut off the service of the 
Boston & Maine under its new management. The service, as is well known, in 
most parts of the road is deplorable. So it seems that we can not hope for much from 
those who own all of our transportation; for where competition is lacking, endeavor is 
lagging, and where complete control is manifest, then always the results of dictator¬ 
ship, unsavory to the public and unbeneficial to the shipper, is sure to appear. 

Three railroads controlled 96 per cent of our railroad mileage in 1909. The roads 
were the New York. New Haven & Hartford, 1,818 miles; the Boston & Maine, 
1,888 miles; and the Boston & Albany, 864 miles. The New Haven swallowed the 
Boston & Maine, its competitor, larger than itself, and is now having a hard time to 
digest it. The New Haven also, by a traffic arrangement, has virtually acquired 
the Boston & Albany, so that at the present time we have the whole three roads in 
one combination. 

I urge that the Grand Trunk be allowed to buy or own what steamboats it desires, 
for I believe that it is their intention to stimulate commerce through the port of 
Boston by steamers running, not only to Great Britain, but with our own ports in the 
United States. And in this connection I wish to here repeat briefly that all our 
steamboats between here and Portland have been absorbed by the New Haven, 
contrary to the laws of the United States. These steamboats running along our coast 
from all intermediate points of importance, directly parallel to the New Haven system, 
so in this regard our coastwise commerce is also in the hands of the New Haven mo¬ 
nopoly, owning parallel and competing lines, those on land and those on sea, which, 
if I mistake not, is contrary to the laws of the United States, as stated above. This 
is known to the President of the United States and his Attorney General, but is 
winked at. 

Massachusetts has advantages in trade and commerce which the Grand Trunk 
seeks. This is apparent to the managers of the Grand Trunk, and on the other hand, 
the Grand Trunk has advantages for us which are of paramount importance to us. 
Boston is now our principal port, and it probably always will be, but we have other 
cities which can grow with the Grand Trunk’s aid. In the discussion of the Grand 
Trunk situation I have not yet heard much of anything relating to our transportation 
connections for the development of trade and commerce. This is of more than passing 
interest and is worthy of most careful analysis, particularly distances and routes, 
etc., which connect us with the commerce of the world. 

First, it is well to bear in mind that broadly speaking Liverpool is the most impor¬ 
tant point of England and is near enough to the other European ports for our pur¬ 
poses to be considered a shipping center. Boston is nearer Liverpool than New 
York or any other port of the United States except Portland. Boston has, at the 
present, time, three great transportation arteries which are natural routes; the first 
may be classified under the head of steamship lines along our coast which have already 
been absorbed by the New Haven. These lines go south and connect with lines 
going west, but it is clear that freight coming from the south over these great ocean 
waterwavs must be delivered at New York where these lines center, rather than 
be brought to Boston, which would be far out of the way; hence, the greater amount 


102 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


of traffic from the south Atlantic coast naturally goes from the south to the port of 
New York by the stea!mship routes. This also applies to many New England cities 
nearer New York than the port of Boston. 

The next great route artery is the Mohawk Valley. In this valley the freight from 
the great region south from the Great Lakes, the region of the Mohawk Valley itself, 
and the regions of Lake Ontario and Lake Erie are taken up; added to this also is 
a large number of important cities, both inland and on the Lakes, that feed into the 
Mohawk Valley sphere, and still farther west beyond Cleveland we find the great 
areas of the prairies and the great fields of the northern central States radiating from 
fertile countries toward Chicago, St. Louis, and Cleveland, feeding for the most part 
through this same Mohawk Valley. Thus, this vast area mentioned and its tribu¬ 
taries is served by the New York Central Railroad, which with the New Haven has 
its traffic alliances. These places create an enormously productive business, feeding 
from the United States northwest around Lake Michigan, and raises about one-half of 
the grain of the United States and fully one-third of the cattle. But this business 
goes mostly to New York. Besides this area, the Mohawk Valley draws more to 
itself from Montana and Wyoming, the largest sheep producers in the world, Wis¬ 
consin, Minnesota, and Washington, first, third, and fifth respectively in lumber, 
and also draws from the north central States with their agricultural products, lumber 
and live stock, and great manufacturing centers of iron, packing houses, grain products, 
flour and malt liquors; all these pour through the Mohawk Valley route and are all 
tributary to the New York Central, going mostly to New York. There are four lines 
which lead to this valley; two of them go to New York. The New York Central is 
one and the West Shore is the other. The other two routes, the Boston & Albany 
and the Hoosac Tunnel route of the Boston & Maine lead to Boston. The latter road 
is controlled by the New Haven. 

Each of these four roads, two going to New York and two coming to Boston, has track 
connection at Hoffmans, 25 miles from Albany, and I would for the moment center 
your minds at this town of Hoffmans and let us see some of the distances to it. First, 
it is clear that the lines from Hoffmans to New York have a great advantage over the 
lines from Hoffmans to Boston, both in grades and distances, for it is 50 miles nearer 
by rail to New York and the grade to New York is one-half to one-fifth less than the 
grade to Boston. And although Boston is 180 miles nearer Liverpool than New York, 
this difference does not compensate for the fact that the great areas mentioned feed¬ 
ing through the Mohawk Valley can reach tidewater at New York easier than they can 
reach tidewater at Boston, thus Boston, although connected with the Mohawk Valley 
sphere, and nearer Liverpool than New York, can not expect to get more than an over¬ 
flow of the trade coming through the Mohawk Valley, owing to railroad distance and 
railroad grade. We are thus, although a valuable and nearer port to Liverpool, 
deprived by New York interests of the commerce of our own country. 

Let this situation be carefully borne in mind, that added to this misfortune we find 
the New York Central has six tracks through the Mohawk Valley and four, tracks down 
the Hudson, again still making freight beyond our reach. Again the New York 
Central runs the whole distance from Albany to New York at river level or sea level, 
confining itself closely to the banks of the Hudson, and the grades of the West Shore 
Railroad, although frequent, has at least, a 50-mile stretch where it also sticks closely 
to the banks of the Hudson River. These considerations again make us the more 
helpless. 

Now, let us consider the two routes from Hoffmans to Boston. One is the Boston 
& Albany and the other is the Boston & Maine, over the Hoosic Tunnel division; the 
distance being on the Boston & Albany 227 miles, and over the Boston & Maine 214 
miles. The Boston & Maine is 13 miles shorter and its maximum grades only about 
two-thirds of those of the Boston & Albany, but neither of these routes can adequately 
compete with the two routes from Hoffmans to New York. 

I will now consider the three other great traffic areas, and the point of transcendent 
import to us with them is that they are all naturally tributary to Boston. The first 
is, of course, the Lawrentian system, or St. Lawrence Valley, perhaps the best natural 
waterway in the world. It reaches through the Great Lakes and with slight breaks, 
by navigable waters, clear to the foot of the Rocky Mountains. 

In this great area flourishes, first, our whole tier of Northern States; secondly, the 
whole of the Canadian Dominion, practically east of the"Rockies. For years to come 
enormous traffic will come from this region from both sides of the line, especially north 
and northwest. Still will come the traffic of the countries beyond the Pacific. Sup¬ 
plementary to this natural waterway and bound up with it are especially the Great 
Canadian railway systems, not only transcontinental from ocean to ocean, as now, but 
covering the whole fertile and productive interior with a perfect network of rails! 

We find the Canadian Pacific Railroad, with its lines of steamers reaching to China 
and India on the Pacific over its own lines and the Atlantic end running through New 


N. Y. ; N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 103 


England. Again, there is the Grand Trunk octopus with its thousands of miles; also 
the Grand Trunk Pacific in its rapid completion through new and rich territory from 
ocean to ocean. Through the equally important Northern Railway, Mackenzie 
Man’s system with 5,000 miles of line in operation, and aiming at extensions seaward. 

All these, coming naturally down the St. Lawrence Valley, come into our sphere 
and there is no port so well calculated as Boston to handle the traffic in the winter 
months, or the extra traffic from Montreal the year round. For six or seven months 
of the year in the open season Montreal and Quebec have the advantage, Montreal 
being the greater of the two. Indeed, no port of the world has a better physiological 
situation than Montreal. It is now the second port on the American continent in 
sum of trade and has an ever-increasing natural hold. 

Boston has advantages which will make the partner of Montreal in this vast trade 
the year round, especially as the winter port, if we work right. 

The St. Lawrence Valley, the third sphere, is naturally an important route for for¬ 
eign traffic, and its future possibilities is a vast field of consideration and of the utmost 
importance to Boston. What ports shall be chosen for the handling of this great 
traffic? Let us see: Montreal and Quebec are hardly available because they are closed 
with ice from five to six months of the year at a season immediately after the har¬ 
vesting of the crops. They can never be controlling ports for this great British and 
Dominion traffic. The Grand Trunk knows this. We know it. We and they want 
that business. The other ports of serious consideration are Halifax and St. John, 
New Brunswick, Boston, New York, and Portland. Portland can be eliminated as 
a competitor to Boston, first, on account of bad grades to Canada, and, secondly, be¬ 
cause there is only a slight difference in distance to Liverpool, and, thirdly, Boston’s 
size already as a port makes it preeminent. 

Now let us consider the difference between Boston and New York, where our ad¬ 
vantages are clear. First, it is 50 miles shorter by rail from Montreal to Boston than 
it is from Montreal to New York, and if the Grand Trunk should build its own line 
into Boston the distance would be still less. 

Boston has another great advantage: The Delaware & Hudson Railroad along Lake 
Champlain finds steep cliffs and sharp curves, making a serious drawback to freight 
traffic in New York. Again, freight carried down the Hudson Valley is carried over 
the West Shore line and the West Shore route has a bad grade to New York, thus 
destroying the only material advantage that this route has. Lastly, be if remembered 
that Boston is 180 miles nearer Liverpool than New York is. Boston has a distinct 
advantage over New York in competition of business from Montreal. 

There are two remaining ports, Halifax and St. John, New Brunswick. I admit 
that St. John is 212 miles nearer Liverpool than is Boston, and Halifax is 501 miles 
nearer Liverpool than is Boston, but. this does not give either of these cities an ad¬ 
vantage over us because the route over the Intercolonial Railroad from Montreal to 
St. John, with easy grades along the St. Lawren'ce Valley, is 740 miles as against 335 
miles to Boston; the Canadian Pacific route to St. John has such heavy grades that it 
can not be considered an important route for heavy traffic. 

This leaves us Halifax as the last port to be considered. Halifax with its deep, 
open harbor is in a worse position than St. John. It is 837 miles from Montreal by 
the Intercolonial line to Halifax, and by the Canadian Pacific line from Montreal, 
via St. John, to Halifax is 758 miles, with heavy grades, particularly between Montreal 
and St. John. 

Thus I have briefly yet, I hope, concisely shown a fundamental reason why the 
Grand Trunk wants to come here, but there are other reasons of no less importance. 
The Grand Trunk at Coteau Junction, 38 miles west of Montreal, makes a short cut 
across the St. Lawrence on a bridge of its own and runs across the St. Lawrence Valley 
to the head of Lake Champlain, where it connects with the Central Vermont and thus 
gives us a still further saving in distance of 34 miles. 

6 & Miles. 


Coteau Junction to New York. 338 

Coteau Junction to Boston. 339 

Coteau Junction to Portland.. 336 

Coteau Junction to St. John, New Brunswick.... 519 

Coteau Junction to St. John over the Intercolonial..-. 778 

Coteau Junction to Halifax over the Grand Trunk, Canadian Pacific, Interco¬ 
lonial..-. 796 

Coteau Junction to Halifax over the Grand Trunk-Intercolonial. 875 


Thus Boston is the best port geographically for this great Canadian and British 
traffic, and has the best line to reach from the St. Lawrence over the Ottawa division # 
of the Grand Trunk, thence to the head of Lake Champlain, thence to Central Ver¬ 
mont. If producers in Canada and the northwest understand that their goods can be 









104 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


shipped cheaper through, and that extra expense of shipping through Canadian ports 
is a tax on each pound, they will demand the cheapest outlet and this demand can 
not and will not be disregarded. 

I have attempted broadly to show the natural flow of traffic between central North 
America and the North Atlantic coast. Such considerations as I have given are all 
of importance to our future history. 

Traffic like a stream from the hillsides will flow in the lines of the least resistance. 
I do not deny that Boston will have to compete against New York, but what I say is 
this: That we have already humbly submitted to New York domination, and the 
entry of the Grand Trunk is a chance for our future development and an opportunity 
to save ourselves from further aggression. Boston has natural advantages over all 
other ports, and I believe that if we embrace the opportunity offered we will be a 
controlling factor in traffic arrangements, and do well in bringing Boston back to her 
former prestige through the great commerce and trade with our British neighbors, to 
whom we are already under a huge debt of gratitude, both in trade and commerce. 

These are a few facts. If every citizen of the State knew them the New Haven 
would not dare oppose the entrance of any system which would give us relief from 
the hands of the monopoly in our midst. 

Mr. White. I should like to leave this list of speeches, entitled 
“A resume of the evidence submitted to the Massachusetts Legisla¬ 
ture on the application of the Southern New England Railroad Cor¬ 
poration to enlarge and extend its corporate powers/’ These 
speeches all bear on the same problem. 

Exhibit H. 

No. 1.—Speech of La Toilette, April 12, 1910. Merger notes from La Follette’s 
speech. 

No. 2.—Copies of statement of Frederic C Dumaine, showing his interpretation of 
the powers of the Boston Kailroad Holding Co. 

No. 3.—-(a) Speech of Norman H. White, embodying facts from La Follette’s, Grand 
Trunk and New Haven, and facts from the commission on commerce and industry in 
their report March, 19Q8. (b) Digest of above. 

No. 4.—The Antimerger League. Votes of various organizations. 

No. 5.—Statement of Attorney General Malone, of Massachusetts, January 20, 1909. 

No. 6.—(a) Copy of the decision of the Supreme Court Of Massachusetts in the case 
of the attorney general against the New York, New Haven & Hartford Railroad (con¬ 
cerning the holding of Massachusetts trolleys by the New Haven road), (b) Copy of 
the United States suit against the New York, New Haven & Hartford Railroad Co., 
instituted by Roosevelt and stopped by President Taft about a week after the passage 
of the Boston Railroad Holding Co. bill, (c) The ruling of Attorney General Herbert 
Parker, April 28,1905, in reply to an order of the Massachusetts House of Representatives 
whether the New Haven had the right to purchase trolleys, (d) The ruling of Attor¬ 
ney General Parker, April 6, 1903. (e) Statement of Charles F. Choate, jr., counsel 

for the New Haven road made, on behalf of Timothy E. Byrnes, vice president of the 
New York, New Haven & Hartford Railroad, made immediately after the decision of 
the Massachusetts Supreme Court 

No 7.—Resume of evidence submitted to the Massachusetts Legislature on the 
application of the Southern New England Railroad for the Grand Trunk, including 
statements made b^ Moorefield Storey; Earl H. Fitzhugh, president of the Southern 
New England; David O. Ives, manager of the transportation department of the Bos¬ 
ton Chamber of Commerce. 

Report of the joint boards of the. directors of the port of Boston and the board of 
railroad commissioners. 

Statement of Frederick C. Salter, European traffic manager of the Grand Trunk 
Railroad. 

Statement of Hon. John F. Fitzgerald, mayor of Boston; John J. Attridge, of the 
Boston city council; W. S. Schuster, of the governor’s council; R. S. Bauer, of the 
Essex County Board of Trade; Norman H. White, of Brookline; D. F. Lawrence, 
general freight agent of the Central Vermont Railroad; E. H. Vaughan, city solicitor 
of Worcester, Mass.; H. H. O’Rourke, alderman of Worcester, Mass.; Hon. William S. 
McNary, port of Boston director and former United States Congressman from Massa¬ 
chusetts; Charles T. Tatman, of Worcester, Mass.; A. M. Child, secretary Haverhill, 
• (Mass.) Board of Trade; Thomas H. Shepard, of Boston, for the export lumber trade; 
Andrew A. Casassa, chairman of the board of selectmen of Revere; Hon. Eben S. Ste¬ 
vens, representing the Business Men’s Association of Webster and Dudley; Robert C. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 105 


King, member of the United States Leather Co. and member of the Chamber of Com¬ 
merce; Alexis P. Boyer, jr., chairman of the board of selectmen of Southbridge and 
representing the Board of Trade and Commercial Club of Southbridge. 

Remarks by M. P. O’Shaughnessy, of Southbridge; George Grant, newspaper pub¬ 
lisher, Southbridge; James Cox, of two manufacturing concerns of Webster; Joseph P. 
Love, business man and former Massachusetts representative of Webster. 

Argument of Joseph B. Eastman, secretary of the Public Franchise League. 

Newspaper editorials from all parts of the Commonwealth of Massachusetts, includ¬ 
ing indorsements from every newspaper of note. 

Vote of the Milford Board of Trade. 

Statement of John H. Murphy, secretary of the Lowell Board of Trade, and others 
from this board and the Real Estate Exchange. 

Resolutions and reports of the Boston Chamber of Commerce indorsing the entrance 
of the Grand Trunk. 

Resolutions of the Massachusetts Real Estate Exchange. 

Report of the special committee of the Lowell Board of Trade. 

An order adopted unanimously by the Massachusetts senate in the year 1911. 

Mayor Fitzgerald’s letter to the Grand Trunk Railroad, Ottawa, Canada, under date 
of April 26, 1911. 

Votes of the Essex County Boards of Trade held at Salem, Mass., February 15, 
1912. 

No. 8.—Statement of Gov. Douglas against the New Haven monopoly afld the taking 
of the Boston & Maine Railroad (p. 79, Report of Commission on Commerce and 
Industry, 1908); also statement of James R. Orozier, one of the commissioners in the 
same report (p. 83). 

Statement of Ex-Gov. Curtis Guild in the Commercial Bulletin. 

No. 9.—Letters between Norman H. White and President William H. Taft concern¬ 
ing the New Haven monopoly and the dropping of the United States suit. 

No. 10.—Speech of Louis D. Brandeis, February 11, 1908, before the New England 
Dry Goods Association. 

No. 11.—Analysis of the shareholders on the New England Investment and Security 
Co. Illegal. (1910.) 

No. 12.—Report of the railroad commissioners, January 18, 1909, concerning the 
taking back by the New Haven of the Bennington & North Adams Street Railway 
Co. and the Berkshire Street Railway. This report being a reply to an order of the 
Senate asking whether or not such purchase is expedient. 

No. 13.—Statement of Louis D. Brandeis on the financial condition of the New 
Haven, 1907. 

No. 14.—Map showing trolleys, railroads, and steamships owned by the New Haven 
in 1908. 

No. 15.—Argument, of Charles S. Mellen and Hon. William B. Lawrence, October 
18 and November 9, 1909, before the bank commissioner, the tax commissioner, and 
the railroad commission regarding the illegal increase of the stock of the New Haven 
Railroad. 

The Chairman. I did not mean that we asked you to conclude 
now. 

Mr. White. I do not wish to take any more time than is my share, 
but I can simply say this. I do not believe my good friend over 
yonder will dispute that there is a huge transportation monopoly in 
New England. I do not believe any member of this committee will 
dispute it. I do not believe the New Haven road or their friends can 
establish the fact that such monopoly of trolleys,and the monopoly 
on the Boston & Maine Railroad, which virtually sealed the monopoly, 
was not known to be contrary to the laws of Massachusetts, as 
described by unanimous decision of the Supreme Court of Massa¬ 
chusetts. Now, with a monopoly established against our law, they 
then turned and made a Boston holding device, which in itself seems 
to most eminent people illegal. Immediately after the creation of 
that holding device the United States Government stopped its suit, 
and we seek relief. We ask you, gentlemen, if it is not a possibility 
that you should analyze this thing and sift it, exactly like my state¬ 
ment. and of my first statements, regarding a gentleman named Taft. 


106 N. Y., 1ST. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


It is a current impression, as this gentleman in New York, a stranger, 
wrote me that Mr. Taft is the President’s brother. Those rumors 
should be run down; we should find out where we stand. And I 
think, Mr. Chairman, in view of the fact that the present Attorney 
General has already dropped the suit, it seems to me that for our 
ultimate protection and for the welfare of our citizens we should have 
a remedy. 

Mr. Garrett. How does the Boston & Maine compare in mileage 
with the New York, New Haven & Hartford road ? 

Mr. White. The Boston & Maine in iron is, I think, about a couple 
of hundred miles longer than the New Haven railroad iron; that is, 
the individual tracks of the New Haven. It was a case of one com¬ 
pany swallowing another—the one larger than the other. 

Mr. Chairman, I have forgotten one thing. I do not wish to 
trespass upon your time, but I am very much interested in this. 

In the year i907, May 31, the New Haven Co. consolidated itself in 
and with the Consolidated Railroad Co. in Connecticut, and got a 
charter in’that company, which charter is a huge holding company, 
with the power to buy gas, electric light, water power, and all those 
lines of human endeavor may be called public franchise business, 
and they have gone forth and raised their capital from $87,000,000 
some ten years ago to $450,000,000 odd, nearly one-half a billion of 
dollars, and considerably more than one-half of that great capital 
is invested in things which are not railroads. It is not a monopoly of 
railroads we have; we have a business, a vast huge holding company 
to go into any old thing practically that the public is interested in. 
Now the New Haven Railroad has earned in the last some four or 
five years somewhere about 11 per cent on its common stock, and it 
has earned about 4J per cent on its bonds, but, Mr. Chairman, it only 

E a dividend of, say, 4, 5, or 6 per cent. Why? Because it is so 
3d down with these nonproductive things that are not railroad 
things that it has to pay a much lower dividend than it, as a railroad, 
earns, and it seems to me, as a citizen of my State, absolutely unfair 
that I should get poor service, that our people should be maimed, 
and that our freight should not go as it often has not gone properly, 
according to the congress in Boston now, and we bear the load of the 
establishment of a huge, vast holding company, a company going into 
vast enterprises simply because the people of the New Haven like 
to do it. It seems to me entirely unfair and unreasonable, and in 
that connection I will leave here with you an analysis, by Mr. Louis D. 
Brandeis, of the financial condition of the New York, New Haven & 
Hartford Railroad and of the Boston & Maine Railroad in 1907, 
showing the enterprises into which the New Haven road has gone. 
The United States suit also indicates the enterprises into which they 
have entered. 

Mr. O’Shaunessy. I wish to make this request, that Mr. Davidson, 
from Worcester, has a very important communication to make, and 
will be able to conclude his remarks in a few minutes, probably within 
10 minutes. 

The Chairman. If the committee has no objection, we will give ten 
minutes to this gentleman. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 107 

STATEMENT OF MR. HERBERT DAVIDSON, OF WORCESTER, 

MASS., PRESIDENT OF THE NEW ENGLAND ASSOCIATION 

OF COMMERCIAL EXECUTIVES. 

Mr. Davidson. Mr. Chairman and Gentlemen: I represent the 
city of Worcester, and I find myself in somewhat of an unfortunate 
position here because I am obliged, at the start, to take issue somewhat 
with my predecessor. I do not wish it understood, so far as I am 
concerned or the interests that I represent, that we come here making 
any attacks upon the President of the United States, upon the Attor¬ 
ney General, or so far as I know, upon the New York, New Haven & 
Hartford Railroad, and it so happens I am president of the New 
England Association of Commercial Executives, representing 60 
commercial organizations in New England. I understand the prin¬ 
cipal business of this committee is to investigate the stopping of the 
construction of the Grand Trunk Railway, and upon that issue I am 
here, and I should like to be heard. 

It may be that the committee will wish to go into the trolley matter, 
but I am of the opinion that the State of Massachusetts has plenty of 
power to enforce that matter and I want to assure you gentlemen 
there are two sides to that question and, that so far as I am concerned, 
I hope the Federal Department of Justice will make an investigation, 
if one is to be made, rather than this committee. I wish to say further 
that, so far as Gov. Draper is concerned, there is nothing secret or 
underhanded about the Boston holding bill. In a public address, 
which he delivered before the Worcester Board of Trade in the pres¬ 
ence of 1,000 men, he stated it was his purpose to bring the Bos¬ 
ton holding bill to the attention of the legislature, and we well under¬ 
stood in Worcester that that was his purpose. o, 

In reference to the Grand Trunk Railroad, the Grand Trunk Rail¬ 
road has not operated in New England, except through a subsidiary 
corporation, known as the Central Vermont, and about the year 1910 
we began to hear that they were contemplating building a branch from 
the Central through Vermont at Palmer into the city of Providence, 
and, inasmuch as that road comes within 14 miles of the city of 
Worcester, we of course sought to secure connections at Webster, 
because it was well understood that the Grand Trunk Pacific was 
building an outlet at Prince Rupers, in Canada, which would give us 
an outlet in the west and which would provide us three lines to the 
Grand Trunk and Grand Trunk Pacific, the Boston & Albany, its con¬ 
nections, the Lake Shore & Michigan Central, the New York, New 
Haven & Hartford Railroad. I was secretary of the board of trade 
and Mr. Charles Tatman, to whom reference has been made, was the 
president, and Mr. Tatman and myself went to Providence and we 
interviewed there Mr. Fitzhugh, who was at that time the president 
of the Central Vermont, and was the active man in the construction 
of what was known at that time as the Southern New England, and 
branches, to be constructed from Palmer to Providence. 

We secured from Mr. Fitzhugh the assurance that upon proper 
representations from the city of Worcester, such representations 
as we learned had been made from Providence, that the Grand Trunk 
would consider the construction of a line from some portion of the 
additional line they were to build into the city of Worcester, and I took 
the matter up at that time with Mr. C. M. Hays, the president of the 


108 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Grand Trunk, and I received assurances from him that they would 
entertain such a proposition from the city of Worcester, and as a 
result of the interview we had with Mr. Fitzhugh we procured the 
services of a civil engineer, who drafted a plan whereby, through a 
tunnel 4,000 feet long, entrance could be secured into the city of 
Worcester without passing over the tracks of any ol the competitive 
lines. We had this plan prepared and forwarded to the Grand Trunk 
Railroad, and I have in my possession a letter of acknowledgment from 
Mr. Fitzhugh, stating that that plan was received by that coproration 
and that he would have his own engineers subsequently verify the 
plan. After having secured from the State of Rhode Island the legis¬ 
lation necessary to construct the line as far as Rhode Island was con¬ 
cerned, the Grand Trunk Railroad came to the State of Massachusetts 
and asked for the privilege to build such portion of the line as was to 
be built in the State of Massachusetts, connecting from Palmer to the 
State line into New Jersey, and also providing for a line running both 
north and south, running, I think, from Blackstone to Boston, and 
running into Boston from the north. A bill was accordingly drawn 
and was introduced into the Massachusetts Legislature and, as a 
matter of fact, I did a great deal of work in connection with that bill, 
and although Mr. White did not mention my name, I was one of the 
gentlemen who appeared before the committee at the time this matter 
was before the House. Mr. E. M. Woodward, president of our board; 
Mr. Tatman, and myself were representatives from the Worcester 
Board of Trade, and we were in consultation with the Grand Trunk 
Railroad with reference to the construction of the branch from Palmer 
or from some point on that line into the city of Worcester. 

We were naturally somewhat skeptical, it being the New England 
way to be cautiou^, at least, as to the good faith of the Grand Trunk 
in building this line, and after having had several interviews with 
Mr. Fitzhugh, I requested him to accord us an interview in Boston 
at the Hotel Touraine, where he was stopping, where we could find 
out definitely whether the Grand Trunk was proceeding in this 
matter in good faith. There was present at that interview Mr. 
Louis Booker, Mr. E. M. Woodward, president of the Worcester 
Board of Trade, and myself, and I put the question to Mr. Fitzhugh: 
“Are you intending, Mr. Fitzhugh, to build this line, do you intend 
in good faith the construction of this line, if this charter is granted 
to you by the State of Massachusetts, and are you backed up by suffi¬ 
cient money and authority to construct the line,if the State of Massa¬ 
chusetts grants you this privilege?” and Mr. Fitzhugh replied: His 
reply was that the Southern New England Railroad had asked the 
State of Masschusetts, in good faith, to build this road; that they in¬ 
tended to build it and that they were backed up by the Grand Trunk 
in their contention. I then asked him if he represented the Grand 
Trunk, and he said he did; that they intended, if given the privilege 
by the State of Massachusetts, to build that line from Palmer to Prov¬ 
idence, to build the line, the branch from some portion on that line, 
and to build to the northern and southern extensions. There was 
never any question in our minds, so far as this being an attack on the 
New York, New Haven & Hartford Railroad. We never considered 
that question, and it never was talked. The thing we are anxious to 
have in New England is service, and that was the thing we asked Mr. 
Fitzhugh, whether he would assure us that this fine would be built, 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 109 

and he said he would; he said absolutely, that there was no question 
in the faith of the Grand Trunk; they were able to take care of all 
the freight we would give them and if we would allow them to build 
this line we would have service and ample service over this line, and 
that as a result of that service the New York, New Haven & Hartford 
Railroad would undoubtedly be keyed up so they would give us serv¬ 
ice as well. 

It was our belief that Mr. Fitzhugh was acting in good faith that 
led us, as a board of trade, to work up this measure, and I believe, 
as far as I know, the Worcester Board of Trade did more to have this 
line constructed than any other commercial organization in Massachu¬ 
setts, and we did it simply and solely because Mr. Fitzhugh assured 
us he was representing the Grand Trunk Railroad, and the Grand 
Trunk Railroad would furnish the funds to build this line. As 
a matter of fact, in that interview to which I refer, he stated that the 
contract had been let for the construction of the entire line; that the 
steel had been bought, and that the line would be built in 1913, and 
that undoubtedly upon its completion the line from some portion on 
the road, Palmer or Douglas, or whatever place might be, would be 
constructed into Worcester. He also stated that the Grand Trunk 
Railroad had purchased two steamers; that they would put them on in 
Providence, and that they would give ample competition at that 
point. There never was any question in our minds that Mr. Fitzhugh 
was acting in good faith and that he intended to build this road, and 
we were as much surprised as you gentlemen were; as the gentlemen 
in Providence were ; as the men along the line were, when we found 
this positive statement given out by Mr. Fitzhugh that the line was 
abandoned in its entirety. 

I have the records of the votes taken in our organization in refer¬ 
ence to this matter, if the committee desires to have them furnished, 
and I shall be very glad to answer any questions As a matter of fact 
if we attempted to go into the railroad questions here, you gentlemen 
probably would be busy during the rest of this session. 

Mr. Garrett. Have you any information of any character as to 
how this work was stopped ? 

Mr. Davidson. No, sir; so far as I know there is no information at 
all. I would say, sir, in answer to that question that after the work 
was stopped, as a result of a vote passed by our board, inquiries were 
sent both to Mr. Chamberlin in Montreal, and to Mr. Smithers in 
London, and the cable tolls, as a matter of fact, cost the Worcester 
Board of Trade $27, and we never have received any reply from 
either of the gentlemen. 

Mr. Lenroot. Have you concluded your statement? 

Mr. Davidson. Yes, sir. 

Mr. Lenroot. I understood you to say in your opening statement 
that you did not make any claim about the New Haven Railroad 
being involved in any way in this matter? 

Mr. Davidson. No, sir; I am simply appearing here to tell you what 
my experience has been with the Grand Trunk Railroad. 

Mr. Lenroot. Then I will ask you to indicate to the committee 
what power or jurisdiction Congress would have over this subject 
to give you any relief if the New Haven Railroad is not located? 

Mr. Davidson. As a member of this committee you probably can 
answer that question a great deal better than I can. 


110 N. Y., N. H. & HARTFORD AND GRAND TRUNJ£ R. R. AGREEMENT. 

Mr. Lenroot. I should like to ask you why you are requesting this 
Congress to take action? 

Mr. Davidson. As a matter of fact, I do not ask that, but if you 
would ask me my opinion I will say that I think the Federal Depart¬ 
ment of Justice is the proper authority before whom to bring the 
proceedings. 

Mr. Lenroot. For what purpose? 

Mr. Davidson. For the purpose of finding out whether there has 
been any collusion between these two contracting parties, or not. 

Further hearing of committee adjourned until 10.30 o’clock a. m. 
Wednesday, December 11 , 1912. 


Committee on Rules, 

House of Representatives, 
Washington, D. C., December 11, 1912. 

The committee met, pursuant to adjournment, at 10.30 o’clock 
a. m., Hon. Robert L. Henry (chairman) presiding. 

The Chairman. I want to say the committee have decided that the 
gentlemen in favor of the resolution should close their case by noon, 
and we will give the afternoon to the other side. We must get 
through with this matter to-day, as there are a number of pressing 
matters that the committee must take up to-morrow. 

Mr. O’Shaunessy. We will do the best we can, although at the most 
some of the people who have come here will be closed out under that 
ruling. 

The Chairman. We will give them an opportunity to put their 
remarks in the record. 

STATEMENT OF ME. FREDERICK J. MACLEOD, CHAIRMAN OF 

THE MASSACHUSETTS BOARD OF RAILROAD COMMIS¬ 
SIONERS. 

Mr. MacLeod. My official position is chairman of the Massachusetts 
Board of Railroad Commissioners. I have attended this hearing in 
response to a telegram received from Congressman O’Shaunessy, and 
from the belief of the board which I represent that the matter which 
has been brought to the attention of this committee is deserving of 
the fullest inquiry and the widest publicity. 

I have not prepared any formal statement to make to this com¬ 
mittee, and I hardly know to what extent it is necessary for me at 
this stage of the proceedings, after the other testimony that has been 
offered, to go very fully into the case. I think, however, that I 
perhaps might start by making a definite statement in regard to a 
matter which was made a subject of inquiry at the hearing yesterday, 
as to whether or not there was at the present time any proceedings 
pending before the Federal grand jury of the district of New York 
with reference to this matter. Now, that is a matter upon which I 
am qualified to give testimony, because on Monday, prior to my 
coming to Washington, I appeared as a witness before the Federal grand 
jury which is now in session in New York. I should say it also, in 
order that my position may be thoroughly understood in this matter, 
that I have no desire or intention to insinuate for a moment that the 



Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. Ill 

Department of Justice is not doing its full duty in this matter, because 
I believe that the inquiry is being prosecuted with vigor. I conferred 
with the Department of Justice several times in Washington, about 
two weeks ago before these proceedings were initiated, and since that 
time the agents of the Department of Justice have been making, I 
believe, a very thorough investigation of this matter, both in Massa¬ 
chusetts and Rhode Island, and I think in other New England States. 

Mr. Garrett. When you referred to this matter, did you refer to 
the Grand Trunk or the entire situation? 

Mr. MacLeod. I think it might perhaps be desirable also, in 
response to that question, to define that matter more accurately than 
the impression which seems to have been left in the minds of the 
committee as a result of the hearing yesterday. 

Some allusion was made by Mr. White, in his testimony yesterday 
in regard to a suit which was brought by the Department of Justice 
some two or three years ago under the Sherman Act, and the aban¬ 
donment temporarily or otherwise of that proceeding; and the 
inquiry was made by some member of this committee, I believe, as 
to whether or not that matter was not now in the hands of the Attorney 
General. I think it is proper to say that so far as I understand, and 
I believe I am not violating proprieties in saying that I understand 
that the inquiry before the Federal grand jury now pending is strictly 
limited to the question as to whether or not the contemplated agree¬ 
ment between the New York, New Haven & Hartford Railroad and 
the Grand Trunk Railroad system is in violation of the Sherman Act, 
and as I understand it, that matter in turn rests substantially upon 
the determination of the fact as to whether or not the abandonment 
of these contemplated extensions of the Southern New England 
Railroad were one of the elements of the controversy; that is to say, 
if the Department of Justice should be able to establish the fact that 
the abandonment of this work by the Southern New England Railroad 
was one of the conditions of the agreement entered into; that is to 
say, if the facts should be found that the New York, New Haven & 
Hartford Railroad offered certain trackage and traffic rights over its 
lines in consideration of the Grand Trunk abandoning its contem¬ 
plated extensions, I think there is very little doubt that that will be 
found to be in violation of the Sherman law. 

Mr. Garrett. You say there is very little doubt that it would be 
a violation of the Sherman law ? 

Mr. MacLeod. Yes; that it would be found to be a violation of the 
Sherman law. 

Mr. Garrett. May I ask you in that connection—that is one of 
the matters which is in my mind—this railroad is uncompleted, of 
course—do you think the Sherman law is sufficiently broad to cover 
a situation of that sort, where a road acquires a possible rival? 

Mr. MacLeod. It is my understanding that if the inquiry should 
develop those facts the Sherman law would cover that situation. 
I have little reason to doubt that if it should be proved that those 
were the facts indictments could be found and convictions returned 
under the Sherman law. 

Mr. Garrett. That is a very interesting question, I think, and a 
question that will be very gravely considered—whether the Sherman 
law is broad enough to include a situation of that character, and 
whether or not it does not need amendments in order to cover cases 


112 N. Y., N. II. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

of that kind. Are there any instances in which the courts have 
passed on that proposition that you know of ? 

Mr. MacLeod. I do not know, and I can not give any particular 
citation on that point. 

Mr. Albert H. Walker. If you will permit me, Mr. Chairman, I 
could answer the gentleman on that point. The United States 
Circuit Court of Appeals for the Third Circuit, in the celebrated case 
known as the “ Reading Coal Combination,” decided exactly that 
point—suppression of the proposed railroad by a combination was a 
violation of the Sherman law. 

The Chairman. Is that case cited in your book, Mr. Walker ? 

Mr. Walker. It is cited in the amendment that I have published 
since. The case is pending in the Supreme Court now, upon appeal. 

The Chairman. We will be very glad to have the reference so as 
to put it in the record. 

Mr. Walker. The reference is: Case reported in 183 Federal 
Reporter, page 497 (and many other cases). 

The Chairman. What judge rendered the opinion? 

Mr. Walker. The opinion was a peculiar opinion, because not all 
the judges agreed on all the points. There were five points in that 
case. This is one point, and the court, by a vote of two against one, 
decided that the Sherman law was violated in that case. The dis¬ 
senting judge did not base his dissent upon any doubts upon the 
application of the Sherman law to such facts, but he based his dis¬ 
sent upon proof of the facts. But it was conceded by all the judges 
that if the projected railroad was suppressed by a combination 
between two corporations, that was in violation of the Sherman law. 

Mr. Garrett. You say suppression by a combination between two 
railroads. Do you mean between one road and a projected road, or 
between two already existing railroads who sought to crush out a 
projected railroad? 

Mr. Walked. The projected railroad was not built at all. 

Mr. Garrett. Yes, but assuming that the insinuations here are 
well founded, that the New York, New Haven & Hartford Railroad, 
by dealing directly with the management of this projected railroad, 
have caused it to be stopped, that would not be on all fours with 
that case ? 

Mr. Walker. Yes, it would be. I see no distinction whatever. 

The Chairman. Now, in the opinion in the Reading Coal case 
then, they held that the conspiracy was between the projected rail¬ 
road as well as the railroad in being at that time ? 

Mr. Walker. Yes. 

The Chairman. I thank you for the reference, Mr. Walker. 

Mr. MacLeod. In so far as the present resolution contemplates 
any inquiry into that particular narrow phase of the present situa¬ 
tion, I believe that the inquiry that is now in progress under the 
Department of Justice will be instrumental in determining what the 
facts are, and if those facts are found to be what I have indicated, 
the Department of Justice, the Federal authorities, are compelled 
to take the action that is necessary and adequate to deal with that 
situation under the existing law. But as I understand it, that is 
the very smallest corner of this whole question, and it is, in many 
ways very much the least important aspect of the whole matter, 
and while I do not intend to go over the ground that has been men- 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 113 

tionecl before, there are one or two points in that connection that I 
should like to make a little more clear than I believe they are at the 
present time in the minds of the committee. 

The road which has been abandoned by the Grand Trunk Railroad— 
and in what I have to say I may use the names “Grand Trunk Rail¬ 
road ” and “Southern New England Railroad” interchangeably, be¬ 
cause while the corporation that is chartered under the Massachusetts 
laws is the “Southern New England Railroad” corporation the entire 
ownership of the stock in the Southern New England Railroad, except 
the necessary qualifying shares, are held by the Grand Trunk Railroad 
of Canada; and the road, I started to say, which was abandoned by 
the Grand Trunk was the road contemplated and in process of con¬ 
struction between Palmer, in Massachusetts, and Providence, in Rhode 
Island. That road was well under way, and the testimony already 
given here shows the extent to which that work had been carried at 
the time the work was abandoned. But so far as Massachusetts is 
concerned, so far as New England is concerned, and I believe so far 
as Providence, in Rhode Island, is concerned, the completion of this 
road was only a very minor feature of the very much larger enterprise 
which the Grand Trunk had in mind in making a direct entry over its 
own rails into the city of Boston, so as to make it possible for them 
to carry over their own rails from Chicago through to Boston the 
great western traffic which might be delivered to them at Chicago, 
which is the focal point for all of this kind of traffic. 

That was regarded, I believe, by the whole New England commu¬ 
nity as one of the most far reaching and most important developments 
commercially and in the way of transportation that has occurred in 
New England for a great many years. It is not necessary for me to go 
into that. If there is anybody who desires to ask any questions I 
believe I can show to the committee exactly how the entrance of the 
Grand Trunk into Boston, and thereby into the commercial heart of 
New England, in the opinion of the best-informed people of Massa¬ 
chusetts was going to be a matter of the very first commercial impor¬ 
tance, and the abandonment of the line from Providence to Palmer 
also contemplates the abandonment of all these projected extensions 
under the act of this year. The original location, from Palmer to 
Providence, in Massachusetts, was obtained under the general law 
without going to the legislature at all, and all the necessary procedure 
under the general law having been complied with by the company 
they proceeded to build. This year they came before the legislature 
for an extension of those rights and with the purpose of obtaining a 
right to build in there their own line from White River Junction to 
Providence. As there were certain rights which the Southern New 
England Railroad desired which they could not obtain under the gen¬ 
eral law they went to the legislature for a special bill, and that matter 
was the storm center of political and transportation interests practi¬ 
cally throughout the entire session of the Legislature of Massachusetts 
last year. 

The matter was referred to a joint board consisting of the directors 
of the port of Boston and the railroad commission sitting jointly, 
and the bill was afterwards referred to the railroad commission as 
an independent board for a report upon the bill, and both the joint 
board and the railroad commission recommended not only the broad 
principle of legislation embodied in the bill, but practically approved 

72177—13-8 


114 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

the terms of the bill with certain amendments; which were suggested 
by the railroad commission. 

In taking that action these public boards were simply voicing 
what I believe was the unanimous—absolutely unanimous—opinion 
of commercial bodies, boards of trade, shippers, and all those who 
had a personal experience with the transportation conditions under 
the present system. As a result, in large measure, of the passage of 
this bill the State of Massachusetts authorized the expenditure of 
several millions of dollars in the great work of development of the 
facilities of the port of Boston, involving many millions of dollars, 
and that while the matter was initiated before the Grand Trunk 
people came before the legislature the expenditure of the funds by 
the directors of the port was in large measure due to the expectation 
that the coming in of the Grand Trunk Railroad into Boston was 
going to make for the development of the port of Boston, which, as 
we saw it, under present management is absolutely impossible. 

Then, as you have already been told, the whole matter was suddenly 
abandoned. Just how sudden that matter was is indicated by the 
fact that I believe less than 10 days' before this public announce¬ 
ment was made there were three or four officials of the Central Ver¬ 
mont Railway, who were also officials of the Southern New England 
Railroad, who appeared before the Boston City Club and gave a 
very glowing description of the improvements that were likely to 
follow from the completion of this road and describing the benefits 
that were likely to accrue for the State of Massachusetts and for 
New England as a whole. 

The Chairman. Let me ask you one question, so as to get it 
clearly in my own mind. I am not sure that I understood the state¬ 
ment fully yesterday. Is it a fact that one and a half millions of 
dollars were spent in actual construction work before the work 
ceased, and that claims, I believe, amounting to another one and a 
h'alf millions are still unsettled, which would make three millions in 
all in work and claims and obligations incurred ? 

Mr. MacLeod. Of course, I do not know what the situation may be 
in Rhode Island, but in the State of Massachusetts they have an 
authorized capital stock of $1,856,000, I believe, all of which has been 
paid into the treasury of the corporation; and I understand unoffi¬ 
cially that a large proportion of that sum has been expended on the 
work already done on the lines in Massachusetts, and I should not be 
surprised if the total amount expended exceeds that amount. 

The Chairman. Exceeds $1,800,000 in the State of Massachusetts ? 

Mr. MacLeod. I should say it certainly would exceed that amount, 
if you take into consideration the obligations in the way of payment 
of land damages already incurred by the company. 

Mr. O'Shaunessy. May I interpose? The mayor of Providence 
tells me that the vice president of the Southern New England Rail¬ 
road told him, they had one and a half million, and that the total 
expenditures involved, in the amount already spent and that con¬ 
tracted for, was four millions of dollars from Providence to Palmer. 

Mr. MacLeod. On the other lines, notably from WLite River Junc¬ 
tion to Boston, as well as on the other branch lines which were 
included in the bill which the legislature passed this year—that is to 
say, the connection from Blackstone to Boston and from Douglas to 
Worcester—all those lines had been surveyed and the preliminary 


N. Y. y N. H. & HAETFOBD AND GEAND TEUNK E. E. AGEEEMENT. 115 

engineering on those lines had been practically completed, but no 
definite work of construction had been begun, because in an amend¬ 
ment to the law passed this year it was necessary that the company 
should determine its location as a whole before coming to the board 
of railroad commissioners for approval. 

Now with regard to abandonment of the work, I do not know that 
I have any particular light to throw on that matter. I might say 
I had a conference with Mr. Chamberlin, of the Grand Trunk, in New 
York—I think it was on the 18th of November—and Mr. Chamberlin 
stated at that time that the abandonment of the work on the Southern 
New England Road was not in any sense involved in the agreement 
which had been projected between the two railroads; but Mr. Cham¬ 
berlin also stated that the agreement in its present form—and he 
showed me a copy of the agreement which had been submitted by 
Mr. Mellen—was not satisfactory to the Grand Trunk, and that he 
expected at a later time to make a counter offer, and that if they were 
not successful in getting terms of an agreement satisfactory to the 
Grand Trunk, that they could build their own line into Boston; that 
they wanted the New England business, and they intended to be in 
a position after that to compete for it; and the whole attitude of 
Mr. Chamberlin was what must inevitably have been the attitude of 
any one in similar circumstances; that if this agreement were con¬ 
summated they would not build; and, of course, the signing of an 
agreement between the two roads which would give certain traffic 
and trackage rights over the reciprocal lines satisfactory to the parties 
would inevitably mean the abandonment of the original project; and 
as to whether or not that was definitely intended, I think it is proper 
to observe that the parties must legally have contemplated what was 
the natural consequences of their own acts. 

The Chaieman. Has the agreement ever been signed ? 

Mr. MacLeod. The agreement has been signed by Mr. Mellen on 
behalf of the New York, New Haven & Hartford Railroad. 

The Chaieman. And you saw a copy of that agreement ? 

Mr. MacLeod. I saw "the original agreement. 

The Chaieman. Have you a copy of it in your possession? 

Mr. MacLeod. No; I have not a copy in my possession, and I 
understand that while the Department of Justice has a copy they 
have taken the position that they received it in such a way that they 
do not desire to give out a copy. 

The Chaieman. Could you prepare a copy of it in any way for the 
benefit of this committee ? It is a very important paper, and if we 
take action we would like to see a copy. 

Mr. E. G. Buckland (vice president of the’New York, New Haven 
& Hartford Railroad Co.) Mr. Chairman, I telegraphed to Mr. 
Mellen yesterday, stating that the Attorney General stated that he 
did not feel that he ought to give out a copy under the circumstances 
under which it was received, and yesterday afternoon I received this 
telegram from Mr. Mellen, dated Boston: 

Your message delivered. Freest permission possible. 

Personally I have not a copy in my physical possession, and I do 
not know of any copy this side of New Haven. 

The Chaieman. Could you get a copy from the Attorney General, 
or have a copy made? It seems there is no objection to it, and the 


116 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


committee would like, and certainly must have, a copy of it in order 
to act on this matter intelligently, it seems to me. 

Mr. Buckland. There is not the slightest objection to having this 
copy, and it is only a question of how soon we can get it. 

The Chairman. I should be very much obliged if you would get a 
copy for the committee as soon as possible. 

Mr. Buckland. I will ask my assistant here to call up the Attorney 
General’s office in the hope of having a copy made, and in the interim 
I will wire to New Haven. 

Mr. MacLeod. I think it ought to be made clear to the committee 
that while this is spoken of as an agreement it might more properly 
be described as an offer on behalf of the New York, New Haven & 
Hartford Railroad; that is to say, in the letter of transmission which 
Mr. Mellen sent with the agreement to Mr. Chamberlain he stated 
that this document embodied what he believed was the understand¬ 
ing that had already been verbally entered into between the presi¬ 
dents of the two roads, and the same had been duly executed on 
behalf of the New Haven and was submitted to Mr. Chamberlain to 
become effective when executed by Mr. Chamberlain on behalf of the 
Grand Trunk Railroad, and in the meantime to be considered in the 
nature of an offer. 

Mr. Chamberlin stated that the agreement was satisfactory so far 
as it went, but it did not cover all the points which he believed were 
embodied in the verbal understanding, and that the argeement, or 
offer, in its present form was not satisfactory to the Grand Trunk, 
and that they expected later to make a counter offer. That is the 
situation in regard to that. 

It is my guess that the attorney general is going to have a great 
deal of trouble in proving that there was anything else in this agree¬ 
ment except what was embodied in the terms of it. This, of course, 
may represent the whole transaction, but there was a significant 
juxtaposition of events there in the execution of this agreement and 
the practically simultaneous abandonment of the work, but whether 
or not it is possible to show by any proper legal proof that the two 
matters were in any sense connected is rather a different and more 
difficult matter. 

Mr. O’Shaunessy. May I ask Mr. MacLeod this: You would look 
upon the finding of an indictment as doubtful ? 

Mr. MacLeod. I do not know that I ought to express any opinion 
on that, because I do not know what the evidence is. 

Now, with reference to the propriety of inquiry on this whole 
subject matter before this committee, that question has been asked 
of several of the other witnesses, and while it is not my intention to 
do anything more than to state to the committee whatever facts 
may be relevant in this case, and while I do not attempt to suggest 
to them whether or not on those facts they believe that they would 
be warranted in making an inquiry, there are certain aspects of this 
case which do seem to me to justify or make desirable some form 
of Congressional inquiry, and, of course, I appreciate that any con¬ 
sideration of this matter by this committee must be done with the 
idea that the matters developed during the progress of the hearing 
by this committee should decide that the hearings should be held; 
that the matters developed at that hearing might become the basis 
of some legislation on the part of Congress, and it seems to me that 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 117 

if this whole situation is gone into it is going to open up a great 
many questions of very wide general interest, more especially with 
reference to the general control of public utilities by the Federal 
authorities. 

I think the first thing that might suggest itself is the advisability 
of expressly empowering the Interstate Commerce Commission to 
pass upon and approve all these traffic agreements that are entered 
into between the various roads at the present time. 

Mr. Hardwick. Is not there an existing law already on that sub¬ 
ject ? 

Mr. MacLeod. I did not understand that. I understood that 
either on the suggestion of the Interstate Commerce Commission or 
some other source they desired some express authority to pass on 
those agreements. 

Then the consideration of this question, if it is probed to the bot¬ 
tom, will undoubtedly extend to a general inquiry with regard to 
transportation conditions in New England, and I believe that an 
inquiry of that kind would be of the highest public interest. I do 
not believe there is anywhere in the United States to-day where it 
is possible to show the operation of a railroad monopoly as it can be 
found to-day in New England; certainly in no terriotry of equal com¬ 
mercial and industrial importance, and I believe that if an investiga¬ 
tion could be made of those conditions it might raise some doubt in 
the minds of the committee investigating the matter as to whether 
or not the present provisions of the act to regulate commerce are 
adequate to deal with a situation of that kind. 

At the present time we have regulation, but we have regulation 
accompanied by competition, and the work of the regulating author¬ 
ity, State and interstate, is supplemented by the stimulus that comes 
from the natural competition and rivalry of independent railroads 
in the same community. In New England that condition does not 
exist, and my experience is that under those conditions there is a 
point beyond which the kind of regulation we have at the present 
time ceases to become effective. In other words, the regulating 
authorities may bridle a corporation to a certain extent, but many 
cases arise where it is not a bridle that is needed, but a spur, and it 
is absolutely impossible for any regulating authority to give initia¬ 
tive to the corporations under its control, and that initiative at the 
present time comes in other sections of the country from the stimu¬ 
lus of competition, where there are independent roads serving the 
same territory, and where it is absolutely obligatory on each road to 
gd out and hustle for business on its own account and compete in 
service and facilities with the other roads if it is going to get the 
business. Where you have a situation where a single transporta¬ 
tion agency controls the whole territory served, it does not make so 
much difference whether they are particularly active or not, and 
while the regulating authority, as I say, under the existing law may 
exercise a veto power on certain things that the company is doing or 
is projecting, it is impossible to have any real voice in the operation 
of the roads and in providing for the initiative and enterprise which 
are necessary in order to properly serve the community. 

Mr. Garrett. Would it trouble you to interrupt there for a mo¬ 
ment ? 


118 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Mr. MacLeod. Not at all. I should very much prefer to answer 
any questions, because I have not prepared any formal statement. 

Mr. Garrett. To what extent would free competition between the 
Boston & Maine Railroad and the New York, New Haven & Hartford 
Railroad prior to the acquisition of the former by the latter, or such 
part of it as- 

Mr. MacLeod. There was competition between them, I believe, at 
some thirty-odd points of more or less commercial importance in 
the State. 

There is another reason why I believe an inquiry of this kind should 
be made, and that is, that it is absolutely essential as I see it, for any 
kind of constructive railroad development in New England, that 
the present situation shall be absolutely probed to the bottom by 
every possible public agency and authority. The situation in New 
England at the present time is such—the public feeling against the 
New York, New Haven & Hartford Railroad is such; and by public 
feeling I do not mean entirely the feeling of the men on the street, 
but the responsible commercial bodies in the State; the shippers, 
banking interests, and every other agency which in any way touches 
the transportation situation in Massachusetts. The feeling at the 
present time is so intense and so vindictive that any constructive 
railroad program in Massachusetts and New England is impossible 
until this matter is probed to the bottom. 

The Chairman. Let me ask you this question. Were the tracks 
laid on any part of this new line, and was the road operated anywhere ? 

Mr. MacLeod. Nothing except the construction tracks for materials 
and supplies and building of the road. 

The Chairman. How many miles in all ? 

Mr. MacLeod. I could not say as to that. 

I believe that an inquiry, the fullest kind of inquiry, is absolutely 
necessary in the interests of the railroad itself. 

Now I am not one of those who is inclined to say that the present 
system is purposely wrong-headed. I believe that when this matter 
is thoroughly investigated it will be found that there have been a 
number of very valuable improvements that have been made by the 
New York, New Haven & Hartford Railroad upon the Boston & 
Maine system. Very important improvements are in progress, such 
as the electrification of the lines, and I believe that while much of 
the criticism is just, a large amount of the public criticism directed 
against the New Haven management at the present time is unjust, 
and that a proper, thorough investigation which will disclose facts, 
is going to finally get the situation at a point where it is possible for 
something to be done. 

I believe that Mr. Buckland will tell you that it is practically impos¬ 
sible for the railroads at the present time to do their business as they 
should. They are so concerned with all these matters of public agi¬ 
tation that they are obliged to attend to other things besides running 
the railroads, but the only cure for that, as I see it, is to have the 
whole situation thoroughly probed, have the public acquainted with 
all the facts, give the railroads credit for all the good things that they 
have done, see just what the situation is, and then let us start and 
see whether or not it is not possible, by the adoption of a more rea¬ 
sonable and conciliatory attitude upon the part of the public and 
by the same attitude on the part of the corporation, to see whether 



N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 119 

we can not get together in a spirit of compromise and conciliation 
that is absolutely necessary in order that railroad development in 
Massachusetts and New England should go on. 

The Chairman. Is the New York, New Haven & Hartford author¬ 
ized to do all these other things you speak of under their charters 
granted by the respective States through which it runs, to absorb the 
electric lines and things of that sort, or are they violating their charter 
rights ? 

Mr. MacLeod. Mr. Mellen stated in the ofhce of the railroad com¬ 
mission one day that under their Connecticut charter they could run 
anything from a railroad to a ship. 

The Chairman. Under their charter rights? 

Mr. MacLeod. Under their charter rights. 

The Chairman. Is that the case in Massachusetts and Rhode 
Island ? 

Mr. MacLeod. I do not know what the situation is in Rhode Island, 
but the situation in Massachusetts in the main was accurately de¬ 
scribed in regard to the facts by Mr. Wood. While I do not pretend 
to adopt or accept his characterization, the facts in the main were 
correct. 

There is just one other point that I should like to make clear, 
suggested by that inquiry. Reference has been made here to the 
inflated capitalization of the New Haven Railroad, owing to the 
purchase of trolley properties and other properties, at an amount 
largely in excess of their valuation. In so far as that situation may 
exist I think it is fair to point out that the State of Massachusetts 
is in no way responsible for that. The New Haven Railroad, unlike 
the Boston & Maine, does not come before the Massachusetts Rail¬ 
road Commission at all for authority to issue any stock or bonds. 
Its financing is done under its Connecticut charter, and it can prac- 
cally do what seems good to it in its own eyes, so far as that is con¬ 
cerned. But the New Haven contends that we have no authority 
under the law in any way to supervise the issue of stock for improve¬ 
ments which may be made in other States. I see Mr. Buckland has 
before him the report of the validation committee, which was a 
committee consisting of the railroad commission, the tax commis T 
sioner, and the bank commissioner, if I remember it, which sat a 
year or two ago for the purpose of determining whether or not the 
assets of the New Haven were in excess of its liabilities. I was not 
a member of the board at the time that validation was made, but 
I am familiar in a general way with the report which was made; 
and while the special commission had reported that the assets of 
the road were in excess of the liabilities, if you would take occasion 
to examine that report you would also find that the trolley and 
other properties that were purchased by the New Haven road at a 
very large expense were not regarded by this commission as having 
more than a fraction of the value which the New Haven paid for 
them. 

Mr. Buckland. Even so, Mr. MacLeod, the total assets, taken 
altogether—— 

Mr. MacLeod. The total assets were in excess of the liabilities. 
That, it seems to me, is another question where this investigation 
might consider whether or not it is in the public interest to have 
some Federal regulation of the issue of stocks and securities by 



120 N. Y., N. H. & HARTFORD AXD GRAND TRUNK R. R. AGREEMENT. 

railroad corporations doing interstate business. In so far as the 
capitalization of the New Haven Railroad may be inflated or exces¬ 
sive—and I simply put it in that way because we have no means of 
passing upon the matter officially—it means a large increase in the 
fixed charges of the company, which in turn is reflected in decreased 
service and facilities in the State of Massachusetts. It does not 
make any difference to us how careful we are with regard to the laws 
we pass in our own State with regard to the limitation upon the 
issue of these securities, I believe there is no State in the country— 
I think it is generally accepted and understood—where the capital¬ 
ization of public service corporations is so carefully safeguarded as 
in the State of Massachusetts. But here we have an interstate road, 
and the kind of service they give in Massachusetts is conditioned by 
the fixed charges they have to pay upon their whole plant. We are 
made indirectly to assume the burden that may result from any 
improper capitalization. That is another matter which might 
properly be developed if this inquiry should be authorized. 

The Chairman. Is there an^^ movement looking to the revoking of 
the charter rights of this new road and putting it in the hands of a 
receiver in your State or in the other States ? 

Mr. MacLeod. You mean the Southern New England? 

The Chairman. Yes. 

Mr. MacLeod. There has been some movement taken by the gov¬ 
ernor and the attorney general, I believe, in Rhode Island with refer¬ 
ence to the line of the Southern New England Railwa}^ Co., which 
represents a part of the Providence line, and I understand they have 
also filed a petition with the legislature in Massachusetts with refer¬ 
ence to the Southern New England Railroad Co., which represents a 
part of the line in Massachusetts. 

The Chairman. In the State of Massachusetts, where a road has 
secured a charter, has equipped the railroad, and commenced opera¬ 
tions, have they the right to abandon the road, take up the tracks, 
and cease operations altogether ? 

Mr. MacLeod. There is nothing in the general law that compels a 
railroad to build or to exercise any of the franchises which may have 
been given to it. 

The Chairman. But after they have built the road ? 

Mr. MacLeod. Oh, after the road is built and in operation it can 
not be discontinued without approval of some public authority, but 
that does not begin to become effective until the road has actually 
been in operation as a going concern. 

The Chairman. But so far only construction work has been done 
on this road; I mean the tracks are only construction tracks and not 
permanent tracks ? 

Mr. MacLeod. I understand that no permanent tracks anywhere 
have been laid. 

Mr. Lenroot. You used the term ‘‘liabilities” a moment ago in 
speaking of the New Haven road. That term included the stock, I 
presume, as liabilities ? 

Mr. MacLeod. Yes; it included liabilities of all kinds—stock, 
bonds, and indebtedness of all kinds. I believe that more information 
in regard to all the ramifications of the financial end of the New York, 
New Haven & Hartford can be obtained in that special report than 
in almost any other place I know of. The report was prepared with 


N. Y., N. H. & HAETFOED AND GEAND TEUNK E. E. AGEEEMENT. 121 


exceeding care and contains a large amount of very valuable infor¬ 
mation. 

Mr. Leneoot. What is the title of that report? 

Mr. Peeey. “ Report of Joint Commission on the New York, New 
Haven & Hartford Railroad Co.” I will see that copies of this are 
filed. 

Mr. Buckland. In order to get at what was in Mr. MacLeod’s mind, 
I would like to ask, How can there be an inflated capitalization, as the 
matter lies in 3 jour mind, if the combined stock and bonds are less 
than the appraised value of the property which .they represent? 

Mr. MacLeod. I had nothing to do with the preparation of that 
report, but I understand in a general way that the fact of the prepon¬ 
derance of the assets over the liabilities was made possible largely 
through the appreciation of the value of the rights of way which the 
railroad had through the various cities and towns. And I do not 
mean to say that that was not an entirely proper matter to take into 
consideration in the kind of inquiry which was in progress at that 
time, but that was simply due to the working of an economic law, and 
I do not think that that would justify a railroad management of any 
corporation going out of the way and paying an unusual price for any 
properties which it purchased. 

The fact that it does not make them bankrupt does not seem a 
sufficient excuse for making an improvident bargain. 

Mr. Peeey. I have been in conversation with Mr. Cole, secretary 
to the Attorney General, who states that the original copy that the 
department had is now in the possession of Mr. Atkins in New York, 
but they have retained a copy here and are now having an additional 
copy made which will be in our possession by 2.30. 

The Chaieman. That will be sufficient. 

9 

STATEMENT OF MR. GEORGE H. HOLMES, REPRESENTING THE 
PROVIDENCE BOARD OF TRADE, PROVIDENCE, R. I. 

Mr. Holmes. I am a manufacturing jeweler of Providence. You 
have been listening in this hearing with more or less patience to 
statements from State officials, city officials, and more or less 
strenuous arguments from local talent. I wish you temporarily— 
which may relieve your minds—to transfer your viewpoint to the 
commercial side of this situation, and also to take your viewpoint 
from the viewpoint of the State of Rhode Island, which is affected 
more seriously, I think, by this situation than any other community 
in New England. I am directed by the officers of the Providence 
Board of Trade to appear before you in behalf of their members, and 
it is only in that capacity that I pretend to address you. 

That organization, like similar organizations in other cities, com¬ 
prises among its members the most important representatives of 
manufacturing, industrial, and commercial enterprises; but, unlike 
a number of similar organizations in other communities, it has sur¬ 
rounding it unusual conditions. It has already been alluded to, and 
I can not lay too much stress on the fact, that of the approximately 
two thousand manufacturing establishments in our State the combined 
value of outgoing shipments alone for their own products exceeds 
$250,000,000 annually. Now, these same manufacturing establish- 


122 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

merits are large consumers of raw material also, and they have 
incoming shipments of this raw material annually amounting to in 
excess of $150,000,000. 

The Chairman. In a general way, what is raw material ? 

Mr. Holmes. Cotton, wool, iron, and steel chiefly. We are largely 
cotton manufacturers, large wool manufacturers, and our iron indus¬ 
try is large. The shipments of coal and other fuels also make a very 
large item. 

Of course, in addition to those so-called raw materials, the impor¬ 
tation, so to speak, of general commodities, provisions, etc., amounts 
approximately to another $100,000,000 annually. Therefore I 
desire to call attention to the fact that in that little community the 
values of the shipments outgoing and incoming amount to in excess 
of half a billion dollars at a conservative estimate. Understanding 
that situation, there is no wonder that transportation facilities are 
of vital importance to us. 

It so happened that it was my privilege on the 10th day of Febru¬ 
ary, 1910, to present to the General Assembly in the State of Rhode 
Island a petition for a charter for the Southern New England Railway 
and the accompanying act of incorporation. At the announcement of 
that petition, of course, all our commercial interests were unusually 
aroused, and keen interest was manifested, and for a number of 
weeks statements from all our prominent citizens in favor of the 
project were numerous. I have for your perusal a compilation of the 
events connected with the adoption of the charter, compiled from 
the Board of Trade Journal, which is the official organ of the Provi¬ 
dence Board of Trade. These statements are from absolutely leading 
business men of our community, men of even national reputation 
in their several industries, such men as Robert I. Gammell and 
William Gammell, and are absolute facts. 

There is only one statement in this lot in connection with this 
whole matter which I wish to allude to at this time, and that is a 
statement by a man whose integrity and honor are unquestionable, 
and who is an avowed enemy of intrigue and whose statements are 
now hallowed by the sad memory of the fate that befell him. On 
February 18, President Hays of the Grand Trunk stated: 

If the charter is granted the road will be built, and nothing that the New Haven 
can offer in traffic relations or other considerations can prevent our extending the 
Grand Trunk to Providence. 

The plan to give Providence a competitive service is not in consequence of conflict 
on rates or differentials nor in any sense a retaliatory movement. 

Our proposition to the assembly of Rhode Island is clean cut, and means nothing 
but what it says on its face. We will not beg and entreat where we should be wel¬ 
comed with every expression of friendliness and satisfaction. 

The Chairman. You wish to insert this statement in the record, 
then ? 

Mr. Holmes. I do. 

The Chairman. You may hand it to the stenographer. 

Mr. Holmes. At the same time I would like to have filed a reso¬ 
lution of the Providence Board of Trade on this subject. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 123 


The papers filed by Mr. Holmes are as follows: 

Resolutions passed by the executive council of the Providence Board of Trade, November 

25 , 1912. 

Resolvd, That the executive council of the Providence Board of Trade indorses the 
action already taken by Attorney General Wickersham and his associates and by our 
Repretentatives in Congress, in their investigation of the situation in Rhode Island 
due to the abandonment of construction work on the Southern New England Rail¬ 
road. We also extend to the Department of Justice at Washington and to our Con¬ 
gressmen, any assistance we can render in this investigation. 

Mr. Holmes (continuing). The events succeeding the application 
for the charter and pending its granting, as I have stated, resulted in 
a great many expressions of good will. Of course, the good will may 
have emanated from a natural desire to encourage new enterprises, 
and no doubt much of it may have arisen from a feeling of vindictive¬ 
ness or rebellion against some grievance, either real or fancied, growing 
out of existing transportation facilities. But in any event the good 
will was so strong and so manifest that President Fitzhugh stated to 
me a few months ago that he considered the good will of the people 
of Rhode Island one of the strongest assets of his corporation. 

The Chairman. Let me ask you this, so that I may get it Jxed 
clearly in my mind: You have studied this question very exhaustively, 
as is apparent. Is it a fact that there is no water competition with 
this New Haven & Hartford road that inheres to the benefit of your 
people and those shippers you spoke of ? 

Mr. Holmes. Not so considered, Mr. Chairman, because the trans¬ 
portation companies are controlled practically by the New York & 
New Haven Railroad. 

The Chairman. So it amounts to a practical monopoly on land 
and on sea in so far as that commerce is concerned about which you 
were speaking ? 

Mr. Holmes. Yes, sir; but in view of the fact that you have had so 
many statements to that effect I did not feel like reiterating that 
point. 

Mr. Buckland. Is it not a fact that the Colonial Line is entirely 
independent, operating between Providence and New York? 

Mr. Holmes. I think it is a fact. I intended to state later that 
these transportation facilities were practically all controlled, with 
one exception, by the New Haven road. I am not in a position to 
tell you the amounts of business carried over the Colonial Line, but 
it is considered an unimportant factor in the transportation of mer¬ 
chandise in and out of Rhode Island ports. I think it does more 
or less a passenger business. How much freight business it does, I 
am unable to state, but it is not a factor, and is not considered a 
factor among our shipping merchants. 

Mr. Foster. Do you know whether this Colonial Line is hindered 
in doing business on account of the consolidation between the water 
transportation and this railroad? That is, if other transportation 
lines on water were freed from railroad influence, that then there 
would be real competition which does not exist now ? Do you know 
whether that is true or not ? 

Mr. Holmes. I do not know of my own knowledge. My own 
business does not carry me into the larger manufacturing shipments. 

Mr. Fitzsimmons. There are no railroad connections with that 
steamship line; absolutely none. 


124 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Foster. You mean that this little steamship line has no rail¬ 
road connections with which it can do business ? 

Mr. Fitzsimmons. Just a little toy line; it does not amount to 
anything. 

Mr. Lenroot. It has no trackage facilities ? 

Mr. Buckland. I want to say that the lines carrying standard cars 
of the New Haven road are brought up right by the line of the Colonial 
company on South Water Street in Providence, and any gentleman 
who knows the situation there knows that that is so. Whether there 
is traffic exchanged between them and the Colonial Line is a matter 
concerning which I am not advised. 

Mr. Foster. You do not know that they have any arrangements at 
all? You have only looked into the traffic arrangements with their 
own steamship lines ? 

Mr. Buckland. I only know that there is absolute authority in 
the Interstate Commerce Commission to require those arrangements 
to be made whenever it is brought to their attention. 

Mr. Foster. Do they give the same opportunity to do business as 
they do with their own steamship lines ? 

Mr. Buckland. I do not imagine that they have the same traffic 
arrangements that there are with our own lines, but it is not beyond 
the power of the Interstate Commerce Commission to require those 
arrangements to be made. What I directed my remarks to was the 
evident misinformation of the gentlemen, because our cars go right 
by the wharves of the Colonial Steamship Co. 

Mr. Denver. Do they stop there, or do they go on by ? 

' Mr. Buckland. They deliver all the way along. 

Mr. Hardwick. Do you accept trade from this Colonial Line ? 

Mr. Buckland. I think we are bound to. 

Mr. Hardwick. But do you do it as a matter of fact ? 

Mr. Buckland. As a matter of fact, I do not know, because I do not 
know the physical situation. 

Mr. O’Shaunessy. May I ask, Mr. Buckland, at this juncture, 
if the proprietors of the Colonial Line were not formerly the proprietors 
of the Joy Line ? 

Mr. Buckland. I do not know, sir. 

Mr. O’Shaunessy. I have not the positive facts to bear me out, 
but I believe that the people who own the Colonial Line did own the 
Joy Line, which of course has been absorbed by the New York, New 
Haven & Hartford, and everybody is looking for the absorption of the 
Colonial Line before long. 

Mr. Buckland. That is not a fair assumption. Since that time 
the Panama Canal bill has absolutely prevented the absorption of such 
lines, and it is not fair to infer that such a thing is going on. In fact, 
I know it is not going on and nothing of the kind is contemplated, 
and it is not fair to infer that we are going to violate a law of the 
United States which was passed by this Congress. 

Mr. Holmes. In this connection I think it is perfectly fair to state, 
however, that if the same facilities were extended to the pier of the 
Colonial Line as are now extended to the so-called Providence Line, 
the Colonial Line would be doing a larger business than it is to-day. 

Mr. Hardwick. I wonder if you know whether any effort has been 
made to force this railroad company to do business with the Colonial 
on the same terms as with the others. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 125 

Mr. Holmes. Not to my knowledge. Of course there is more or 
less talk about the ownership of new lines. We have had several of 
them come in there under different conditions, and they have all dis¬ 
appeared except this one. We can draw our own conclusions. 

The Chairman. I want to say that there is a very able committee 
of the House investigating this very proposition, the Committee on 
Merchant Marine and Fisheries, and they propose to make an exhaus¬ 
tive investigation into such just propositions as this. If you gentle¬ 
men think it proper, it might be well to lay the facts before that com¬ 
mittee. They were authorized and given almost a plenary power to 
go into these questions by a resolution from the Committee on Rules. 

Mr. Buckland. I have made a report on steamship lines which our 
company operates or controls, and also made a report, as required by 
that committee, on behalf of the New York, New Haven & Hartford 
Railroad Co., and on behalf of other rail lines as to their relations, 
and I have a personal communication from Judge Alexander, the 
chairman of that committee, stating that he will permit us to have a 
special hearing in regard to the peculiar situation in New England, 
and I had hoped to bring to the attention of the committee the very 
fact that that matter is now under consideration by that committee. 

The Chairman. They have explicit power to go into this question. 
I did not mean to interrupt the line of your thought, Mr. Holmes. 

Mr. Holmes. I am glad to have these points brought up, although 
I am not here so much to argue the details of our situation as the gen¬ 
eral situation in which we are and which has resulted from this good 
will to which I have referred. As a result of that almost unanimous 
good will in our section and the competition, our commercial interests 
have practically entered into an agreement to exchange facilities on 
the Southern New England Railway. That agreement is threatened 
with abrogation, and we believe that as business men we are entitled 
to know whether it is to be abrogated. All appeals to parties con¬ 
cerned in the agreement have failed to clear the situation, and we 
believe that through an investigation of this kind we will be helping 
the matter regardless of any verdict that may be rendered by a grand 
jury or any other form of legal inquiry. 

1 think a business man’s mind is, as a rule, somewhat different from 
the legal mind, in that he likes to make his own deductions from his 
own knowledge. By that I mean that if he is given all the facts in 
connection with the case he himself will determine who is in error, 
and he thereby satisfies himself for his future action rather than 
accepting the verdict of some judicial court. It is for that reason 
that I appeal to you in behalf of the board of trade to urge the passage 
of this bill, which will provide the information which they desire. 

As to the bill itself, I wish to say that the board of trade does not 
desire to go on record as either urging or opposing the second para¬ 
graph of the bill, beginning “Said committee is also directed,” etc. 
Nor have they any evidence to offer at this time in support of the 
so-called results which appear in the fourth paragraph on page 3, 
but they do desire to go on record as strenuously urging the provi¬ 
sion of the third paragraph, which provides for an investigation or 
inquiry in regard to the present situation in Rhode Island brought 
about by the abandonment of work on the Southern New England 
Railway. We feel that a commercial wrong has been committed 
in our own State, and that an investigation of that act is demanded 


126 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


in order to determine wherein the cause lies—whether it be remote 
or whether it be in the immediate vicinity of that depredation. And 
I ask you gentlemen to consider favorably this bill on the basis that 
you are emphasizing in a business community a moral commercial 
code—if there is such a thing—that has been offended in this instance 
by an important corporation or corporations, as may appear here¬ 
after. 

Reference was made in the early part of this hearing to certain 
work being done by the State of Rhode Island on the pier and liar- 
ybor development. I, together with the mayor of Providence, who 
is here, and Mr. Samuel M. Conant, the chairman of that commission 
and a member of the State Harbor Improvement Commission, have 
under supervision the construction of this pier. In connection with 
the construction of that pier correspondence has passed between the 
representatives of the Southern New England Railway and that com¬ 
mission, and I desire now to offer to you, in behalf of the State Har¬ 
bor Improvement Commission of Rhode Island, this correspondence. 
We thank you very much for the time you have allotted to us. 

The correspondence introduced by Mr. Holmes is as follows: 


STATE HARBOR IMPROVEMENT. 


Providence, R. I., November 11, 1911. 

Samuel M. Conant, Esq., 

Chairman State Harbor Improvement Commission, 

Statehouse, Providence. 

Dear Sir: The Southern New England Railway Co. desires to lease for its corporate 
purposes for such time and upon such terms as may be agreed upon the northerly 
side of the new pier about to be constructed by your commission. 

Please consider this a formal application for such a lease, and I suggest a conference 
in the near future, as the Southern New England Railway Co. is anxious to know at 
as early a date as possible, in order that it may perfect its plans for the utilization of 
this pier, whether your commission will grant the lease herein asked for. 

Yours, very truly, 

(Signed) John S. Murdock, 
Attorney for Southern New England Railway. 


The above is a true copy of the original application for a lease of the northerly side 
of the new State pier, sent to Chairman Conant, of the State Harbor Improvement 
Commission, by Attorney John S. Murdock, of the Southern New England, under 
date of November 11, 1911. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


Providence, R. I., October 30, 1912. 

John S. Murdock, Esq., 

Vice President Southern New England Railway Co., 

1039 Grosvenor Building , Providence, R. I. 

Dear Mr. Murdock: It is the opinion of the State Harbor Improvement Commis¬ 
sion that an early conference is desirable in relation to the new State dock. The lease 
should come up for early consideration, together with the layout of the track. 

Will you be kind enough to take this matter up with your people and notify me as 
soon as possible as to a time when you can meet the commission in conference. 
Cordially, yours, 

(Signed) Samuel M. Conant, 
Chairman State Harbor Improvement Commission. 


The above is a true copy of the original of a letter sent by Chairman Samuel M. 
Conant, of the State Harbor Improvement Commission, to John S. Murdock, under 
date of October 30, 1912. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 



X. Y v X. H. & HARTFORD AXD GRAND TRUNK R. R. AGREEMENT. 127 


Southern New England Railway Co., 

0 „ Providence, R. I., October 31, 1912. 

Mr. Samuel M. Conant, 

Chairman State Harbor Improvement Commission, 

Room 322, Statehouse, Providence, R. I. 

Dear Mr. Conant: I received your letter of the 30th, suggesting a conference in 
relation to the State wharf. I have written Mr. Fitzhugh, and we will arrange a 
meeting as soon as engagements will permit. 

Yours, very truly, 

(Signed) John S. Murdock, 

Vice President. 


T ^ e above is a true copy of the original of a letter received by Chairman Samuel 
M. Conant, of the State Harbor Improvement Commission, from Vice President John 
S. Murdock, of the Southern New England Railway Co. 

* H. M. Barry, Notary Public. 

• Providence, R. I., December 7, 1912. 


Southern New England Railway Co., 

, Providence, R. I., November 6, 1912. 

Mr. W.sD. Bullock, 

Civil Engineer, City Hall, Providence, R. I. 

Dear Sir: In regard to your conversation with me the other day about the 6-inch 
girder rails to be used on the State dock, will you kindly advise me how many feet will 
be required on the dock, giving me the Southern New England Railway’s portion, also 
the portion which will be used by the city, and any other railroads. 

We are making a requisition for these rails, and I would like to have the correct 
amount. 


A small sketch of the dock showing where these tracks will be laid will be greatly 
appreciated. 

Thanking you, I beg to remain, yours, truly, 

(Signed) T. I. Ellis, 

Division Engineer. 


The above is a true copy of a letter received by W. D. Bullock, chief engineer on the 
State pier project, from T. I. Ellis, division engineer of the Southern New England 
Railway. 

H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


Mayor’s Office, 

Providence, R. November 13, 1912. 

At this date the State Harbor Improvement Commission, with all members present, 
met, for a conference on the question of the abandonment of work on the Southern New 
England Railway by the Grand Trunk Railway system, President E. H. Fitzhugh and 
Vice President John S. Murdock of the Southern New England. 

Gov. Aram J. Pothier accepted an invitation to be present also. 

Mr. Fitzhugh was requested to give an explanation of the attitude of the Grand 
Trunk system with reference to the work on the Southern New England, and talked for 
a time with the commission, first, however, making the request that no record be made 
of his statements. He said that he had been acting under instructions to discontinue 
work on the Southern New England branch. 

At the conclusion of the conference, the following statement was issued to the press: 

“A conference was held in the mayor’s office, Providence, to day, at which were 
present the following named: President E. H. Fitzhugh and Vice President John S. 
Murdock of the Southern New England, Gov. Pothier, Mayor Fletcher, Chairman 
Samuel M. Conant and George H. Holmes of the State Harbor Improvement Commis¬ 
sion, the latter representing also the special committee of the Providence Board of 
Trade. 

“The general situation was discussed in an informal manner. Mr. Fitzhugh made 
the statement that he had had no negotiations, directly or indirectly, with the New 
Haven road officials, and until further advised he felt he could make no further state¬ 
ment at the present time. His orders to stop the work in Rhode Island, he said, came 
to him from the management of the Grand Trunk.” 




128 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

After the preparation of the above, the commission adjourned to November 14, at 
10.30 a. m. 

The above is a true copy of the records of the State Harbor Improvement Commis¬ 
sion, under date of November 13, 1912, including a statement to the press to which 
Mr. Fitzhugh gave his assent. 

H. M. Barry, 

Notary Public , and Secretary State Harbor Improvement Commission . 
Providence, R. I., December 7, 1912. 


Providence, R. I., November 13, 1912. 

Mr. E. J. Chamberlin, 

President of the Grand Trunk Railroad, Montreal , Canada. 

Dear Sir: In common with the State of Pvhode Island, the city of Providence, and 
other State interests, the Rhode Island Harbor Improvement Commission have, 
through representations and requests of officials of the Southern New England Rail¬ 
way Co., made changes in the State dock now under construction to accommodate 
the entrance of the Grand Trunk, or its subsidiary, into this territory, and have gone 
to some expense therefor. 

It was voted at a meeting of the commission, held to day, that the chairman address 
a letter to the president of the Grand Trunk, acquainting him with the obligations and 
changes in the construction of the State dock due to the requests from the engineeis of 
the Southern New England. 

As a commission, we deeply deplore the cessation of work on the Southern New 
England Railway, and are anxiously awaiting definite news as to a general resumption 
of the work at some near-by time. 

In fact, the State Harbor Improvement Commission, acting for the State of Rhode 
Island, respectfully requests a decided and comprehensive reply from you as to 
whether the work on the Southern New England Railway is to be discontinued by the 
Grand Trunk or resumed in the near-by future, or, as has been represented by news¬ 
papers of New England, it will be definitely abandoned or taken up at the pleasure of 
some other railroad system. 

We remain, respectfully, yours, 

State Harbor Improvement Commission, 
(Signed) Samuel M. Conant, Chairman. 


The above is a true copy of the original of a letter sent by Chairman Samuel M. 
Conant, of the State Harbor Improvement Commission, to E. J. Chamberlin, under 

date of November 13, 1912. T t u ^ 

’ H. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 


Providence, R. I., December 4, 1912. 

Mr. E. J. Chamberlin, 

President Grand Trunk Railway System, Montreal, Canada. 

Dear Sir: On November 13 I addressed a letter to you, as chairman of the State 
Harbor Improvement Commission, of Rhode Island, asking for information in ref¬ 
erence to the position of the Southern New England Railway as to the completion of 
the work already begun by them, and stating that we had made changes in the con¬ 
struction of our State pier, due to requests of engineers of the Southern New England 
Railway Co. 

We complied with these requests, after consultations with President Fitzhugh and 
Attorney John S. Murdock, and upon the formal application for a lease, made Nov¬ 
ember 11, 1911, and signed by John S. Murdock, attorney for the Southern New 
England Railway Co. 


As chairman, I have had no reply from you, and would suggest that, as we are 
acting for the State of Rhode Island and her deck facilities, it would be courteous to 
the State and the Commissioners to give us what information lies within your power 
as to the future of the Southern New England Railway and the incompleted gash left 
in our territory. 

Respectfully yours, . (Signed) Samuel M. Conant, 

Chairman State Harbor Improvement Commission. 


The above is a true copy of the original of a letter sent by Chairman Samuel M. 
Conant, of the State Harbor Improvement Commission, to E*. J. Chamberlin, under 
date of December 4, 1912. , T ,, _ _ ... 

II. M. Barry, Notary Public. 

Providence, R. I., December 7, 1912. 




N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 129 

STATEMENT OF HON. WILLIAM F. MURRAY, A MEMBER OF 
CONGRESS FROM MASSACHUSETTS. 

Mr. Murray. Mr. Chairman and gentlemen, it has been suggested 
that I may be able to help the committee in this matter, and it is only 
because I think I may be able to help the committee that I have 
signified a willingness to address the committee at this time. My 
reason for believing that I may be able to help the committee is that 
as a member of the Massachusetts Legislature during 1907 and 1908 
I was called upon, as the other representatives and senators were 
called upon, to consider the relations of the New York, New Haven 
& Hartford railroad to the traveling public, end because I also con¬ 
sidered that question as a member of the governor’s council of Massa¬ 
chusetts, having served on the council of Gov. Draper who has been 
referred to here. 

To-day and all during this hearing I have tried to look at this thing 
not only as an active Member of the House of Representatives from 
the State of Massachusetts but also as a colleague of you, Mr. Chair¬ 
man, and you, gentlemen. I have tried to put myself in the position 
that you are in in regard to this thing, and I have asked myself, 
“Why are these men here; what do they want; what can we do to 
help them V’ I am going to take the last of those questions first and 
consider that, because unless we can heln them it does not make 
much difference what they want or why they are here. If we have 
not the power to help them it is hardly worth while to consider their 
mission 

The first article of the Constitution of the United States defines the 
powers of the Congress of the United States, and very early in that 
article we find that Congress is given power to regulate commerce 
with foreign nations and among the several States. Now, this 
transportation problem that we are attempting to have solved here 
this morning is entirely an interstate question. Indeed it has some 
international features, because we are up there on the Atlantic sea¬ 
board. Boston, Providence, and the other manufacturing centers 
of New England are shipping to all parts of the world, and by reason 
of that condition this question has some international features that 
might seriously engage the attention of this committee. 

But whether it has international features or not, it surely has 
interstate features. You, Mr. Chairman, come from the great State 
of Texas, and your district probably comprises a total number of 
square miles as great as that of all the New England States put 
together. I suppose it is difficult for you to realize that when places 
are only 40 miles apart one of jthem may be located in our Common¬ 
wealth of Massachusetts and the other in the great State of Rhode 
Island. It must be more difficult to realize that Palmer is in the 
State of Massachusetts, although it is only a few miles from the great 
seaport town of Rhode Island—the city of Providence. It is an 
interstate problem, and the Legislature of Massachusetts and the 
governor of Massachusetts could not cope with that situation. We 
tried, but we could not do it. Under the constitutional provisions 
that require that our State give due consideration to the acts of the 
State of Connecticut, to the acts of the State of Rhode Island, to the 
acts of other States, we could not do things that this Congress can do 
and that we are asking you to do. 

72177—13-9 


130 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

The definite tiling that we are asking you to do is to appoint a 
special committee, composed of seven men, to investigate certain 
things. Those things may all be summarized in the statement that 
it is an investigation of the transportation problem of New England 
that we are asking for. It was suggested here a few moments ago 
by the skillful counsel of the New Haven road—and the New Haven 
always has skillful counsel—that the Committee on the Merchant 
Marine and Fisheries was to conduct an investigation. Yes, I voted, 
as you voted, to put that resolution through. We authorized them 
to investigate the relations between the New Haven Railroad and the 
New England Navigation Cos. That is practically all, Mr. Buckland, 
that the Committee on Merchant Marine and Fisheries can do under 
the rules of the House of Representatives, because that is the Mer¬ 
chant Marine and Fisheries Committee. That committee has power 
to investigate those problems pressing for solution before the Congress 
of the United States which have to do with the sea. 

Mr. Buckland. But the scope of the resolution is much broader. 

Mr. Murray. Let us get the resolution. Let us not go off on a 
tangent. That has been the whole trouble during this investigation. 
This resolution covers four pages and has many clauses; but to sum¬ 
marize that resolution, it provides for an investigation of transpor¬ 
tation manipulation in New England. While there may be much 
language to that resolution empowering the Merchant Marine and 
Fisheries Committee to investigate; while there may be many sec¬ 
tions and much detailed language, as a practical proposition it is 
required to investigate, and can investigate under the rules of the 
House of Representatives, only the relations between the New Haven 
Railroad and the shipping companies that may be doing business 
with it. And I stand on that statement, and you, Mr. Chairman, 
know that I am standing on safe ground. 

The Chairman. Mr. Murray, I just want to say this, that in addi¬ 
tion to the power given to the committee under the general rules, 
this committee reported a special resolution adding vast powers to the 
general power of the committee in regard to these questions. 

Mr. Murray. Let us find out where we stand. Do you agree with 
me or not that all that is required to do may be summarized in an 
investigation of the relations between the transportation company 
and steamship companies of the United States and foreign nations ? 
I think I am right. 

The Chairman. I can not be sure of that until I look at that reso¬ 
lution. 

Mr. Murray. There is the resolution. 

The Chairman. I have not read it for some time. Just proceed 
with your argument. 

Mr. Murray. The New England Navigation Co. is a subsidiary 
company of the New Haven corporation. It has a total capitaliza¬ 
tion of something like $56,000,000. If I am not right, I hope the 
gentlemen representing the railroad will correct me. That is a little 
more than one-tenth of the total capitalization of the New Haven 
Railroad, which during the last 10 years has grown from a capitali¬ 
zation of less than $100,000,000 to something like $87,000,000—to a 
capitalization that approaches a half-billion dollars; and yet this 
problem is dismissed with the suggestion that the Merchant Marine 
and Fisheries Committee is going to investigate one side of it and 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 131 


that therefore no select committee should be created by this Com¬ 
mittee on Rules. That to my mind is entirely ridiculous, because it 
will simply hit the high places in regard to a particular side of the 
proposition. 

Now, Mr. Greene of Massachusetts, a Republican member of that 
committee, is here. He is my good friend; I like him; I know he is 
efficient; I know he is honest; I know he is thorough in the works 
he undertakes. I would not have him for the world think that I am 
criticizing him either publicly or privately or attempting to cast any 
aspersions on his efficiency. I hope that when my record of Con¬ 
gressional service is completed I may be able to point to a record 
that approaches in its perfection the record that he has made here. 
But it is not right to expect him and Judge Alexander and the gen¬ 
tlemen of this Committee on Merchant Marine and Fisheries to 
attempt the work of investigating this great transportation problem, 
when under the rules of this House of Representatives, as defined 
under the manual and under the resolution, which they say has 
merely enlarged their powers, they are entirely restricted as a matter 
of fact of common sense to an investigation into the Merchant Marine 
and Fisheries side of the proposition. Now, Mr. Chairman, I have 
been on committees, and I have watched committees work under the 
State legislature when the New Haven counsel have been present. 
What will be their attitude when they go in before the Merchant 
Marine and Fisheries Committee and an attempt is made to investi¬ 
gate not only the sea side of this proposition and the relations between 
the transportation company and the water company, and some 
enthusiastic member of that committee, desiring to see right and 
justice done, proposes some question that may inquire into the rela¬ 
tions between that company and the street-railway companies of 
New England ? Immediately the counsel would be upon his feet sug¬ 
gesting that this matter is entirely beyond the scope of the resolu¬ 
tion, and you will always find him saying, 11 While we have no objec¬ 
tions, we do hope that this inquiry will be restricted in the way the 
rules provide.” 

What we want is a select committee that shall not be restricted to 
a given side of this question. We want a committee that can go into 
practically all sides. I am told that there are other committees of 
the House of Representatives that could investigate this matter. 
The great Judiciary Committee could investigate it under the rules of 
the House of Representatives. It could consider the corporation 
and trust sides of this question, and I know, and you know,that the 
Judiciary Committee could probably undertake an investigation of 
practically everything covered by that resolution so ably drawn by 
Mr. O’Shaunessy. But what is the practical situation with regard to 
the Judiciary Committee % You, Mr. Chairman, are a member of that 
committee. You know that of the membership of that great Judi¬ 
ciary Committee, seven of them are conducting the impeachment 
proceedings that our House of Representatives ordered them to 
conduct at the bar of the Senate. Those seven men include four 
majority members and three minority members, and the able and 
distinguished chairman of the committee, our colleague from Alabama , 
is one of those seven. Is it fair to expect the Judiciary Committee to 
be able to give its attention to this thing until after this impeachment 
proceeding is ended ? You and I know that it is bound to take up to 


132 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

t 

the holidays, and probably beyond the first of the year. As a practi¬ 
cal matter, even if the Judiciary Committee could do this work, it can 
not do it now. 

I realize that under the rules of the House of Representatives the 
great standing Committee on Interstate and Foreign Commerce could 
give its attention to this matter, because under the rules as they have 
been construed that committee has jurisdiction over subject matters 
similar to the one contained in the resolution. But what is the prac¬ 
tical situation ? It is a regrettable thing, and we are all sorry to know 
it, that the able chairman of that committee, Judge Adamson of 
Georgia, has to leave Washington to be with his lovable wife in what 
are probably her last days. We know that the members of that com¬ 
mittee, out of respect to their able chairman, are not giving attention 
to many of the great problems that are before them, and it is not fair 
to expect that committee to undertake this great work; at least not 
until after the first of the year. 

Those are the facts, Mr. Chairman. You and I know them to be 
facts, and you and I know that the only practical way in the closing 
days of this busy short session of the House of Representatives to get 
this inquiry conducted and ended is to have men selected who are not 
tremendously busy with other things, who will give their entire time 
and attention to the work for which they may be selected. 

Now, is it desirable to have them selected? 

The Chairman. May I suggest there that probably the Attorney 
General will have worked out this matter ? 

Mr. Murray. I ask, is it desirable? I like the Attorney General; 
I think he is a great man and I have said so publicly. The reason 
I admire him is because I served on the Committee to Investigate 
Expenditures in the Department of Justice, and the Attorney Gen¬ 
eral has been a frequent witness before that committee. I think 
he is entirely honest in his administration of the Department of 
Justice, and while I have often differed from him and from his chief, 
President Taft, the basis of my criticism has never been that I 
doubted that honest motives and sincere beliefs underlie their judg¬ 
ment. But the fact is that the people of Massachusetts and of New 
England are not at all satisfied with the way the Department of 
Justice and the Executive branch of the Government have handled 
this New Haven situation. 

Mr. Hardwick. Possibly they will be better satisfied after March 
4th. We hope so. [Laughter.] 

Mr. Murray. Of course; and, Mr. Hardwick, as a basis of making 
them thoroughly satisfied, I want to see # a separate committee ap¬ 
pointed that will get the facts of this case before us, so that whoever 
may be Attorney General may proceed not only before a grand jury— 
it is all right to go before a grand jury, get an indictment, go through 
a trial, and convict a man- 

The Chairman. Is there not great danger of creating a panic ? 

Mr. Murray. Of course, you and I have heard that objection 
urged- 

Mr. Hardwick. I want to direct Mr. Murray’s attention to one or 
two things that are troubling me, but are not peculiar to this one 
resolution. In the first place, I do not conceive that it is any func¬ 
tion of Congress or any of its committees to order an investigation 
except for legislative purposes. If the purpose of the investigation 




N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 133 

is merely to give publicity to facts, if the purpose of the investiga¬ 
tion is merely to call attention to the fact that some department has 
or has not done its duty, then it is not in my judgment a correctly 
taken proceeding, because the only right we have, under numerous 
decisions, in ordering these investigations is to get information so that 
we may know how to legislate. 

That brings us right down to this question: Is there anything in 
the pending proposition that seems to indicate a necessity for addi¬ 
tional law ? If so, I would like to have you address yourself to that 
for a minute. 

Mr. Murray. I am not going to give any snap judgment on that. 

Mr. Hardwick. I am not trying to get that. 

Mr. Murray. I understand your suggestion. You and I are 
talking here just the same as we talk individually or in the House 
in a matter that is of common concern. I do not know what good 
can come from this investigation. I know that investigating com¬ 
mittees are not in great favor here just now. I know it has been the 
fashion to criticize the work of investigating committees. But, to 
cite one instance, I know that the people of Lawrence, Mass., are 
much happier to-day than they were a year ago to-day. They had 
splendid meetings of patriotic citizens, doing a great public good, 
only as recently as Thanksgiving Day, and I believe that a large 
reason for the increased happiness of the people of Lawrence, Mass., 
is because of the work that this committee did last winter. 

Mr. Hardwick. We did not order an investigation in that case. 

Mr. Murray. You did not order an investigation in that case; you 
conducted an investigation. If you will do it with respect to the 
New Haven situation just as you did with respect to the Lawrence, 
Mass., situation, I shall be satisfied, and I believe everybody in New 
New England will be satisfied. What we did with respect to Law¬ 
rence was to apply to the problems of Lawrence, Mass., a judgment 
that was not warped and colored by a personal bias and did not have 
thepersonal equation running all through it. 

That is the great trouble in Massachusetts now. Mr. Mellen thinks 
that Mr. Brandeis is probably one of the worst citizens in the world, 
and Mr. Brandeis thinks that Mr. Mellen is probably one of the worst 
citizens in the world. These men look upon one another as men who 
are actuated solely by personal motives, as personal enemies, each 
one of whom is trying to thwart the other. You can not get any¬ 
where as long as men apply to problems like these considerations of 
that sort. But men who are down here in the House of Representa¬ 
tives, men who compose this Rules Committee, and men like you can 
bring to the consideration of these public questions the kind of judg¬ 
ment and the kind of thought that I believe to be essential if we are 
going to reach a right conclusion. 

The Chairman : What about the investigation that is going on 
under the auspices of the Interstate Commerce Commission in regard 
to this matter ? 

Mr. Murray. I want to send my mind back to the time when it 
was proposed to investigate Lawrence, Mass. We were told, “The 
Bureau of Labor is investigating Lawrence. An executive branch of 
the Government is doing this thing in most satisfactory fashion, and 
we ought not therefore to have a congressional committee conduct 
this partisan inquiry.” When it was proposed, under your motion, 


134 W. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

to create the Stanley Steel Investigating Committee, we were told 
that Commissioner Neill was doing all the work that could possibly 
be done. We were told that the great industrial commission had 
gone over everything that could be possibly considered in connection 
with that matter, and that every scrap of testimony that a congres¬ 
sional committee could hope to get was already buried in the volumi¬ 
nous report of that great industrial commission. When it was pro¬ 
posed to investigate, under the leadership of the brilliant gentleman 
from Georgia, the Sugar Trust, we were told the same sort of thing. 

I am one of those who believe that the Lawrence investigation 
resulted in great good. I am one of those who believe that the 
Stanley steel investigation resulted in great good. And I know that 
the work done by the Hardwick Investigating Committee in this very 
room was a really systematic and valuable contribution to the case. 
I hope that the same sort of thing may result from this investigation, 
if it is ordered. Perhaps I am enthusiastic. Surely I am young 
and I may have the enthusiasm of youth, but my hope is that these 
arguments that are made here are on all fours with the objections 
that were made with respect to the select committees that were cre¬ 
ated in the other cases. 

The Chairman. I think the sugar investigation brought about the 
putting of sugar on the free list, but I am not sure that it met with 
universal approval. 

Mr. Murray. I think we got more votes on it than on any single 
factor in the campaign. [Laughter.] 

The Chairman. I think it helped a great deal. I am just throwing 
out these suggestions to you because we are getting advice from several 
quarters that these matters are being investigated now by a different 
tribunal and by various departments and machinery of the Gov¬ 
ernment. 

Mr. Murray. Mr. Chairman, in my legislative experience I used to 
hear from men like the gentleman "from the New Haven Railroad 
certain stock phrases, stock objections to the consideration of legis¬ 
lation. I remember that whenever we had any of these transportation 
problems before us we were always told about the policy of the Com¬ 
monwealth. We were told that the policy of the Commonwealth 
with respect to transportation problems was so and so. We were 
given reasons about that continually and constantly, and we are 
given here in Congress pretty much the same kind of general objec¬ 
tions that are always applied to such a situation. They do not 
talk so much here about the policy of the Government as they do in 
the Massachusetts State Legislature, but they talk about the activities 
of coordinate branches of the Government." 

You and I are representatives of the people. The people know us. 
The people in your district know you and like you. The people in my 
section know me. The American people almost entirely know some 
Member of Congress either in the House or in the Senate. They have 
concrete knowledge about them; it is not an abstract proposition. 
But the men in the executive branches of the Government do not 
have the close relations with the people which by virtue of their 
positions they are expected to have. What the Department of Justice 
does may be of interest to some classes of our citizens. What the 
Bureau of Labor does may be of interest to some classes of our 
citizens. But what the Congress of the United States does, and what 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 135 

a committee of the sort we propose to have created here will do, is 
to focus the attention and to got these things into the minds of the 
people, without bias, without prejudice, but in a clear-cut fashion 
that will be the forerunner of the settlement of all these problems. 

You, Mr. Chairman, made the best argument that I have heard in 
this whole hearing. You suggested that the result of the sugar com¬ 
mittee’s work was to put sugar on the free list. I believe that is 
true. I believe the same sort of good can be done by a committee 
of the sort proposed with the respect to the transportation problem. 
I believe the result of such a committee’s activities would be to solve 
that problem; and the best evidence that it needs to be solved is the 
statement, rather flippantly made, ‘‘We have been under investiga¬ 
tion for six years-” 

Mr. Buckland. Not flippantly, but seriously. 

Mr. Murray. Very well; I withdraw the suggestion. But, seri¬ 
ously or flippantly, the statement was made that they have been 
under investigation for six years, and the situation to-day is in my 
opinion worse—and I am not a pessimist—than it was five years ago. 

The Chairman. Just a suggestion here. This raises a very inter¬ 
esting question in my mind, and I would like to know from you, and 
later from Mr. Wialker, if he cares to discuss it—the author of the 
History of the Sherman antitrust law—just what power our Govern¬ 
ment has undei the present antitrust law to deal with questions of 
this sort. That is to say, where a corporation in this country enters 
into .combination by agreement with corporations or individuals in 
Canada, or England, or some foreign country, just what power we 
have to deal with that question under existing law. and if there is not 
sufficient power. Might not this bring out facts that would throw 
light on the problem so that we might base some legislation on it ? 

Mr. Murray. I think that is so, and I will give you an authority— 
the Attorney General of the United States. The Attorney General 
gave me one of the best law lectures I ever listened to in my life when 
he appeared before our committee one morning and was asked ques¬ 
tions by the gentleman from Kentucky, Mr. Cantwell, and the gentle¬ 
man from Texas, Mr. Beall, and the gentleman from Mississippi, 
Col. Witherspoon. It was just about the time of the Tobacco Trust 
decision, and those gentlemen all interested each in a particular 
problem that affected his locality, and especially interested in the 
attitude of the Attorney General with respect to that problem. Mr. 
Cantwell, for instance, was much disturbed about the activities of the 
department with regard to the tobacco farmers down in Kentucky, 
and he wanted them to know about that sort of thing. Mr. Beall 
was interested in the attitude of the department with respect to the 
prosecution of men who had combined to increase the price of cotton. 
Judge Witherspoon was also interested in that phase. 

After answering the special questions that werO asked of him, the 
Attorney General made a statement with respect to the field of the 
borderland of the law, in which borderland of the law were thousands 
of cases that might be within the Sherman law, or that might be 
entirely outside of that law, and to which that law did not apply. 

And he described to our committee just what the situation was 
with respect to those problems. Incidentally, he had a suggestion 
with regard to an industrial commission, which I did not believe in 
and which I do not suppose many of those on our side do believe in; 



136 N. Y., N; H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


but he did point out clearly the lack of certainty that exists in the 
minds of the business men of the country and the best lawyers of the 
country with respect to how far the Government of the United States 
can go in a matter of this kind. And if there is uncertainty and doubt 
in the mind of the Attorney General of the United States and the best 
lawyers of the country, certainly it is a question that should engage 
the attention of the law-making branch of the Government to define 
what we have and to add any new legislation that seems to be 
desirable. 

I think that is the best answer to that question that I can possibly 
give, and I think that a great good would come from recommenda¬ 
tions to define what is or what is not the point of view of Congress 
with respect to this borderland of the law and to existing statutes, or 
to recommend such new legislation as in the opinion of the members 
of the committee that may be appointed should be drafted. I think 
great good will come along those lines. 

Mr. Hardwick. Suppose we were to report this resolution author¬ 
izing the Committee on Interstate and Foreign Commerce, by any 
subcommittee that might be designated for that purpose, to investi¬ 
gate this matter. Now, the difficulty about the Stanley committee 
and the Sugar Trust committee to which you so kindly referred- 

Mr. Murray. It was not intended as a matter of kindness but as 
a deserved compliment. 

Mr. Hardwick. That makes the obligation all the deeper. To 
go back a minute, the special committees are in this shape. They 
might investigate day after day, week after week, and month after 
month, and work their heads off. When they get through they find 
themselves in the position that, if legislation is what they were 
driving at—and that is what they ought to be driving at, except for 
incidental results—they can not report such legislation to the House. 
The jurisdiction belongs to some one of the standing committees, and 
all the work has to be turned over second-handed to one of these 
standing committees to get results. 

Mr. Murray. Let me give you a suggestion before you conclude. 
Let me say to you that I have considered very carefully that phase 
of the matter, or as carefully as I can. It is now close to the end of 
the 62 d Congress. It is unreasonable to expect and suppose that 
any legislation can come, no matter how desirable it may be, and no 
matter how generally desired it may be, during this session of Congress 
from any work that any committee, standing or select, may do in 
these premises. 

Mr. Hardwick. That is very true, but here is the consideration. 
The committees go on from Congress to Congress with their personnel 
largely unchanged. 

Mr. Murray. Will the personnel of the Judiciary Committee be 
much changed in the next Congress ? 

Mr. Hardwick. As far as the Democratic side is concerned it will 
not be much changed. 

Mr. Murray. As far as the Republican members are concerned 
there is not one of them returning. 

/Mr. Hardwick. This jurisdiction would probably apply to the 
Committee on Interstate and Foreign Commerce, in my opinion. 

Mr. Murray. The only New England member is Mi\ Gould, and 
he is not coming back. 



N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 137 


Mr. Hardwick. I thought the idea was that the New England 
people were taking sides so rabidly on this subject that probably they 
would not be impartial judges/ The personnel of that committee 
in the 63d Congress will not be materially changed. Whatever 
legislation results from this thing must come from that committee. 
If we could get a subcommittee from that committee, composed of 
members who were going to be on the next Committee on Interstate 
and Foreign Commerce, would we not have all this information where 
it could be used at first hand better, and would not every substantial 
purpose be accomplished just as well? 

Mr. Murray. Who will appoint that subcommittee ? 

Mr. Hardwick. I would suppose the chairman, or acting chairman. 

Mr. Murray. It is only because of the absence of the chairman of 
that committee, the gentleman from Georgia- 

Mr. Hardwick. I understand the situation is not so serious as was 
feared, and we hope he will be back in a few days. 

Mr. Murray. I hope so. 

Mr. Hardwick. At any rate, during his absence Judge Sims, of 
Tennessee, is acting as chairman. He can appoint a subcommittee 
if we report the resolution in that form. You would have a special 
investigation just the same, and you would have it made by men who 
have legislated on this very question. So, just giving you frankly 
and tentatively how I feel about it, it seems to me that would be best. 

Mr. Murray. Personally, I do not care whether it is a special com¬ 
mittee or a subcommittee of the Committee on Interstate and Foreign 
Commerce. 

Mr. O’Shaugnessy. That is my stand, Mr. Hardwick; I want 
action, that is all. 

Mr. Murray. I hope you will not allow this matter to go off on a 
tangent with respect to the suggestion about the Merchant Marine and 
Fisheries Committee, or with respect to suggestions made about the 
Department of Justice and the Interstate Commerce Commission. I 
think this ought to be taken up by Congress, and, personally, I do not 
care how you do it if only you do. In the absence of questions, I 
have nothing further to say. 

Let me suggest that the city of Boston is represented here by the 
assistant corporation counsel, Mr. George A. Flynn, who is willing 
to tell the committee anything it may care to know. 

STATEMENT OF MR. GEORGE A. FLYNN, ASSISTANT COR¬ 
PORATION COUNSEL, BOSTON, MASS. 

Mr. Flynn. Mr. Chairman, there is very little I can say in addition 
to the remarks made by Mr. MacLeod and by my friend Congressman 
Murray. I came here at the request of Mayor Fitzgerald, who, by 
reason of the pressure of other official business at home, was unable 
to attend in person. But he feels, and the citizens of Boston, speak¬ 
ing through him, feel very strongly the need of publicity in this matter. 
The citizens of Boston, individually and through their commercial 
bodies, board of trade, etc., are very much interested in the connec¬ 
tions of the Grand Trunk in the city of Boston. In Massachusetts it 
comes in through the Southern New England Railroad. The com¬ 
mittee may know already that within the last year or two the Com¬ 
monwealth of Massachusetts has appropriated $9,000,000 for the 



138 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

development of the port of Boston. As Mr. MacLeod well said, that 
appropriation was procured and made much easier by the looked-for 
advent of this new railroad which would add to our transportation 
facilities. 

As you know, Boston is the metropolis of New England, the gate¬ 
way of the commerce of New England, and the prosperity of New 
England depends on the increase of our commerce. I doubt if there 
is any section of the United States of equal area where there is so much 
commerce. The people of Boston are much disappointed by the stop¬ 
page of work on this improvement which they hoped would give them 
additional facilities. We believe that an investigation by Congress is 
the best means of procuring publicity, seeing whether or not any 
law has been violated, and if there is any assistance that Congress, 
through additional legislation, may give the people of Massachusetts. 

STATEMENT OF CITY SOLICITOR BLODGETT, PAWTUCKET, 

R. I. 

Mr. Blodgett. Mr. Chairman and gentlemen, I would like to 
leave with you a plan which shows the elevations of the road of this 
proposed New England branch, and also a map of the city which 
shows the right of way which they take. 

The plans referred to were filed with the clerk to the committee. 

Briefly, my testimony in regard to this matter is cumulative, 
and I can only say that we stand back absolutely of what every 
other speaker has said here in regard to us. Here is this company 
which has come in there, and the steam shovel has bisected some of 
our principal streets and avenues to provide an approach from the 
west. It has unfortunately apparently died there, and, so to speak, 
there is a stink from it that goes up to heaven. There does not seem 
to be any way in which we can get at it. If it were only the Grand 
Trunk Railroad, that would be a different thing, but here is the South¬ 
ern New England, which is nothing practically, vou might s^ay, but a 
branch corporation in a way, a corporation wnose only assets are 
what it gets from its parent, the Grand Trunk. And yet the Grand 
Trunk has absolutely, either directly or indirectly, as far as we know, 
no connection with this scheme, so that we have no legal remedy. 

You gentlemen have been considering the matter of how you could 
give us a remedy, which is, of course, the nub of the whole thing. 
These two days that we have had here have shown conclusively 
to my mind how important these things are, how the situation is 
easing itself even at this moment, how we have assurances from 
Mr. Chamberlin which we have never had before, and from Mr. 
MacLeod. These things are being developed, and will be in the 
course of any investigation that is made, whether by a special com¬ 
mittee or a standing committee. But the method should be by 
investigation, something that will bring out the facts differently 
from the way in which they are brought out in a court of law. If 
you make a general investigation you get all kinds of testimony, 
heresay testimony and so on , and all kinds of matters come in, and the 
situation clears itself. 


N * Y v H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 139 

STATEMENT OF HON. R. P. DAIGNAULT, MAYOR OF WOON¬ 
SOCKET, R. I. 

Mayor Daignault. Mr. Chairman, I represent Woonsocket, the 
third largest city in the State of Rhode Island. The ground has 
been so thoroughly covered by Mr. Bliss, a member of our public 
utilities commission, and Mr. Baker, and Mayor Fletcher, and others, 
that anything I might say would be only repetition. I want to say, 
however, that the conditions in Woonsocket are the same as they are 
in Providence and other parts of the State. We have the same 
grievances, only a little more so, because Woonsocket is an inland 
city. We have no tidewater facilities. Not a pound of freight can 
enter the city of Woonsocket unless handled by the New Haven road. 

I want to go on record as being in favor of this resolution of Mr. 
O’Shaugnessy’s. I say, as has been said here before, that if the 
committee or anybody else sees fit to amend it, why that is very 
fair. But we want to go on record as asking for an investigation, 
hoping that a whole lot of good can come to the State of Rhode 
Island and all the New England States. I thank you. 

STATEMENT OF HON. THOMAS L. REILLY, A MEMBER OF 
CONGRESS FROM CONNECTICUT. 

Mr. Reilly. Mr. Chairman, I simply wish to state that I believe 
the greatest satisfaction and the best possible solution of all the 
troubles that certain parts of New England, and particularly Rhode 
Island, Massachusetts, and Connecticut, are laboring under may be 
brought about by an investigation. I do not think anything else 
will satisfy the people. The New York, New Haven & Hartford 
Railroad has its home office in my district. I believe that in justice 
to that great corporation there should be an investigation, but more 
especially in justice to.the great public who believe—and in many 
cases, I think, believe justly—that they are being discriminated 
against and that they are in the clutches of a great corporation. I 
believe there should be an investigation. I think the best possible 
and most satisfactory investigation would be by a special committee. 

STATEMENT OF HON. WILLIAM S. GREENE, A MEMBER OF 
CONGRESS FROM MASSACHUSETTS. 

Mr. Greene. Mr. Chairman, I have been interested in this matter 
and all the testimony that has been given before this committee, 
and I certainly believe that there should be some investigation of the 
subjects that have been brought before you. As to the method of 
investigation, of course, that iests with your committee to decide. 
I do not think it would legitimately come under the Committee on 
Merchant Marine and Fisheries. I am a member of that committee 
and have been for the last 14 years, and I think this would be entirely 
outside of the range of the investigation that we are now authorized 
to make. 

The Chairman. Do you think there are questions involved in this 
matter here to-day that do not come under the scope of the special 
resolution ? 

Mr. Greene. I do. 


140 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

The Chairman. I understand you have a lot of facts here in this 
matter that we know nothing about, but according to your judgment 
probably they could not be reached under the other resolution? 

Mr. Greene. I think not, probably. 

Mr. Hardwick. Some of them could. 

Mr. Greene. Some of them could undoubtedly. But I think it is 
essential that there should be some method of investigation, whether 
by a special committee or by a subcommittee of the Interstate and 
Foreign Commerce Committee, I am not prepared to say. I leave 
that entirely to you. 

STATEMENT OF HON. ERNEST W. ROBERTS, A MEMBER OF 
CONGRESS FROM MASSACHUSETTS. 

Mr. Roberts. Mr. Chairman, I appear at the request of the presi¬ 
dent of the Board of Trade of Everett, Mass., who sent me a com¬ 
munication under date of December 7, 1912, to the effect that there 
would be a hearing on the proposed investigation, as they understood, 
of the merger between the New York, New Haven & Hartford and 
the Boston road. He winds up his statement by saying: 

The Everett Board of Trade is especially anxious that this matter should be investi¬ 
gated and if possible have these two roads separated so that we may again have com¬ 
petition, as we used to have before this merger was effected. 

I assume from a casual reading of the resolution presented by 
Mr. O’Shaugnessy that it is of sufficient scope to include in it the 
investigation of the facts connected with the so-called merger of the 
two roads. I gather from this hearing that the chief complaint of 
the people of Rhode' Island grows out of another proposition, another 
action of the New Haven road, but that the investigation would cover 
not only that but the merger and all other acts of the New Haven 
road which might be said to be in restraint of trade or prevention of 
competition. 

I want to say in conclusion that a great many business men in my 
district, which adjoins the city of Boston, are very much dissatisfied 
with the transportation facilities they now receive, and they feel and 
believe that they are not having the competition and not having tlue 
favorable terms they received before the so-called merger, and they 
have always been dissatisfied with that merger and they would like 
to see the two roads separated if there is any process of legislation 
that can bring that about. 

I will leave this letter with the chairman. 

The letter introduced by Mr. Roberts is as follows: 

Executive Offices, Everett Board of Trade, 

Everett , Mass., December 7, 1912. 

Congressman Ernest W. Roberts, 

Washington , D. C. 

Dear Sir: I understand that there is to be a hearing in the House of Representa¬ 
tives, relative to having an investigation of the merger between the Boston & Maine 
Railroad and the New York, New Haven & Haitford Railroad, on Tuesday, December 
10,1912. 

If this is correct will you kindly appear and use your influence to have such investi¬ 
gation made? 

The Everett Board of Trade is especially anxious that this matter should be investi¬ 
gated and if possible have these two roads separated, so that we may again have 
competition as we used to have before this merger was effected. 

Yours, very truly, " E. I. Blount, President. 


N. Y.y N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 141 

STATEMENT OF HON. JAMES M. CURLEY, A MEMBER OF 
CONGRESS FROM MASSACHUSETTS. 

Mr. Curley. Mr. Chairman and gentlemen, I can only reiterate 
what has been said by the previous speakers. The people of New 
England for a number of years have been looking and hoping for a 
direct connection between New England and Canada in the nature 
of a competing railroad. Boston is within 12 hours of Montreal, 
and the people of New England feel that reciprocity, recently defeated, 
is by no means dead, and the prospects are excellent that it will be 
revived at some time in the immediate future. There is no section 
of the country that would benefit more through reciprocity between 
the United States and Canada than the New England section, and 
if a special investigating committee can by any means clear the atmos¬ 
phere and make possible for New England that connection with 
Canada which it so much desires and which is so necessary to its 
future development, then no more useful purpose can ever have been 
served by any committee of this House. 

STATEMENT OF HON. C. B. WILSON, MAYOR OF BRIDGEPORT. 

CONN. 

Mayor Wilson. Mr. Chairman, I want to say that I represent 
Bridgeport, which is a very large industrial city, the second city of 
Connecticut. At the present time there is no competition whatso¬ 
ever; the New York, New Haven & Hartford owns the railroad, the 
steamship lines, the trolley lines, and all lines of travel to and from 
the city. The competition that we ought to have and which was 
stopped by the so-called merger would very materially help Bridge¬ 
port. We feel also that the road ought to show more consideration, 
give us better facilities, and eliminate the causes of wrecks that we 
have had, and do other things which will materially work to the 
advantage of Bridgeport and the shipping industries. 

STATEMENT OF STATE REPRESENTATIVE LYNN W. WILSON, 
OF CONNECTICUT. 

Mr. Wilson. Mr. Chairman, I understand that your committee has 
authorized the filing of written statements. May I ask how much 
time will be allowed for doing that ? 

The Chairman. We will give you five days if you desire. 

Mr. Wilson. In that case I shall not take more than five minutes 
of the committee’s time. I want to say first that I am not a rep¬ 
resentative but a representative elect to the General Assembly fo the 
State of Connecticut. 

Now, you have heard the State of Connecticut referred to here in 
this testimony again and again as the State which has authorized 
this New Haven monopoly to go out and prey upon interstate com¬ 
merce and upon the intrastate commerce of the other States of this 
Union. I am going to speak to but one point. It seems to me that 
if you gentlemen wul scrutinize the charter which has been granted to 
the New Haven road by the State of Connecticut you will see the 
essential power from which it gets its authority to make these great 
consolidations consists in the fact that it may, issue stock and bonds 


142 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

without any limit at its own will and discretion as long as it chooses 
to print them and as long as it can get a market for them. Now, 
then, if that power is suspended and that power to issue stock and 
bonds without security should be lodged, by an act of legislation not 
now existing but which the Federal Congress has power to pass, in 
the Interstate Commerce Commission, I think that so far as the 
extension of that monopoly is concerned you will have attained 
immediate results. If you authorize the Interstate Commerce Com¬ 
mission to look at every issue of stock and bonds proposed by that 
railroad, with authority to interested parties to appear when a propo¬ 
sition comes along to buy a Connecticut trolley monopoly at three or 
or five four times its value, that authority will not be issued and you 
will get right at the heart of the thing. That is merely by way of 
suggesting necessary legislation. This New Haven road lias been 
chartered by the State of Connecticut as a commercial pirate- 

Mr. Hardwick. Does not your State railroad commission have that 
power in your State ? 

Mr. Wilson. No, sir. 

Mr. Hardwick. Under the laws of Connecticut ? 

Mr. Wilson. In the last General Assembly we tried to put into the 
public-utilities bill which we passed in that year after a bitter contest 
a provision that they should have authority to scrutinize the issuance 
of stock and bonds. Under our system there our Government is 
largely officered by gentlemen who are very close to this road—but 
that is a changing situation—and instead of that modern and useful 
legislation we got a bill saying that if Mr. Mellen should take anything 
for nothing we could send him to j ail, which is exactly no power at all. 
In the coming session of the assembly of the State of Connecticut 
there will be legislation endeavoring to establish that very power in 
our public utilities commission. But suppose you do that; they 
will go right out into South Dakota or some other State, and the 
State of Connecticut can not protect Connecticut, the State of Con¬ 
necticut can not protect Rhode Island, or any other Commonwealth. 

If you will scrutinize the official report of this monopoly to the 
railroad commission, I believe that as business men you will decide 
that upon the face of that report there ought to be some scrutiny of 
the affairs of this organization. You will find a great railroad prop¬ 
erty with enormous income, and you will find other properties, and 
you will find that they say they do not know how much of those 
millions of scrip has been issued for some roads and how much for 
other roads. You will find that the wealth of that great New England 
steam railroad system, one of the most conservative that ever did 
business in this country, is being slowly extracted from it by legisla¬ 
tive process. And I think you will find in the last analysis that the 
value so extracted has been distributed into the pockets of owners of 
trolley roads and steamboat companies. To my mind—but I will be 
willing to leave it to the judgment of any committee that may be 
created—the thing that has been sought to be attained is not' pri¬ 
marily a monopoly but primarily the transfer of one property in the 
possession of one group of citizens by processes of law into the 
pockets of other groups of citizens. My friends, Connecticut and 
New England are full of people who bought New Haven stock at 275 
and 280. They thought it was a solid corporation. If they wanted 
to sell that stock now—and the road is making more money than it 



N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 143 

ever made before—they have to take to-day 134. I think it is a 
question if the Congress can afford to let the income of a great cor¬ 
poration engaged in interstate commerce be diverted to run trolley 
roads and steamboats engaged in interstate commerce, when it 
appears that there is a condition where the very safety of the lives 
of people of the United States is imperiled thereby*. The whole 
question here is whether you want to take money from passengers and 
freight in passage through the United States in order to support securi¬ 
ties entirely within the State of Connecticut and entirely within the 
States of Massachusetts and Rhode Island. 

There is a passage here about rights. In 1911—I have forgotten 
the date—I went out in Bridgeport to a crossing there that goes 
through our city, and I saw the Federal Express in the ditch. That 
is a train plying between Bridgeport and Washington. There were 
some 10 or 12 or 14 people dead there. I think there were no Mem¬ 
bers of Congress, but some may be at some future time, and then I 
am sure that that question will interest Congress. The other day I 
went over to Westport, and there was another wreck, and a great 
many people killed. Four days later down at New Milford there was 
another wreck; the Portland Express left the tracks. Trains do 
leave the tracks, trains are wrecked, the best railroads may have hard 
luck; but in the case of the Federal wreck we found that the road was 
in bad condition. In the Westport wreck we found that the road 
was in bad condition. It is of record in the testimony before the 
investigating committee of the State of Connecticut that men pulled 
spikes in that road with their naked fingers, and that the ties were 
rotten. My friends, I myself went down to the wreck of the Portland 
Express between New Haven and New Milford, and I myself saw the 
same condition of roadbed. And the mayor of Mount Vernon the 
other day went out and pulled spikes with his fingers and found the 
condition of the roadbed to be terrible. 

The Chairman. Have the conditions up there suggested to any 
of the citizens of New England the possibility of Government owner¬ 
ship of railroads? 

Mr. Wilson. I understand, sir, that in Massachusetts there is 
a serious discussion of the taking over of the lines within that State. 
In Connecticut there is some thought along that line—not yet, 
I think, the dominant body of thought—in favor of national owner¬ 
ship of railroads; but unquestionably, sir, these conditions are pro¬ 
ducing in New England a very large but not yet dominant sentiment 
of the nationalization of the steam roads. 

The Chairman. What do you mean by that national ownership? 

Mr. Wilson. National ownership. 

Mr. Murray. May I file in this place in the committee’s report an 
extract from the Boston Daily Globe of yesterday with regard to the 
speeches delivered at a dinner of the New England Association of 
Purchasing Agents at the Exchange Club in Boston, the names of 
the speakers being Edgar J. Rich, general solicitor of the Boston 
& Maine Railroad, and Henry J. Horn, vice president of the New 
York, New Haven & Hartford. They discussed the proposed legisla¬ 
tion in Massachusetts for the taking over by the Commonwealth of 
Massachusetts of the Boston & Maine Railroad to be owned and 
operated as a State enterprise. The heading is: “Says politicians 
would run road.” They deprecate the agitation for State ownership 
of the Boston & Maine. 


144 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


The Chairman. I am surprised to find that there would be any 
sentiment of that kind in New England. 

Mr. Murray. The retiring president of the Boston Chamber of 
Commerce, Mr. Joseph B. Russell, who has been a conservative of 
conservatives, a man who is no radical, a man who has the confidence 
of the community and of the business men of the community, has 
publicly advocated the State ownership of the Boston & Maine 
Railroad as the only possible means of relief we have from the trans¬ 
portation monopoly that has control of all kinds of transportation 
lines. And I want to say, Mr. Chairman, that unless we do get some 
relief here we are going to get Government ownership. 

I have previously spoken in behalf of the pending legislation, and X 
believe that Government ownership is the only possible solution of the 
problem we have. I just want to incorporate in the record the sug¬ 
gestion that you and I, as Members of Congress, are members of a 
great business enterprise which is probably the greatest business enter¬ 
prise in the world—the Post Office Department of the United States, 
with its annual receipts of $250,000,000. The Congress of the United 
States, acting as the board of directors of that great single business 
enterprise, has conducted it in a way that has been entirely satisfac¬ 
tory to the stockholders of that enterprise, the people of this country. 
We put through in this Congress the parcels-post legislation; we seri¬ 
ously considered putting through the Government ownership of 
express companies, as suggested by Mr. I^ewis of Maryland, and unless 
we can get relief from the kind of thing that has been caused in Mas¬ 
sachusetts b}^ these captains of finance I say the day is not far distant 
when there will be serious agitation for Government ownership of 
these railroad enterprises, and that the Congress of the United States 
will commit this Nation to it. 

I ask to have that article incorporated in the record. 

The Chairman. It will be so ordered. 

The article referred to by Mr. Murray is as follows: 

[The Boston Globe.] 

Says Politicians would Run Road—Rich Deprecates Agitation for B. & M. 

State Ownership—Horn Tells Need of Developing Lines—Mellen’s Course 

Defended. 

Black was the picture of the fate of the Boston & Maine Railroad should the Com¬ 
monwealth of Massachusetts take it over, as painted by Edgar J. Rich, general solicitor 
for that road, in an address last evening at the dinner of the New England Association 
of Purchasing Agents at the Exchange Club. 

Henry J. Horn, vice president of the New York, New Haven & Hartford Railroad, 
was the other speaker introduced by President H. L. Ogden, but Mr. Horn confined 
himself to telling of the “stone wall” which the railroads were up against by reason of 
their need to develop their systems and their extreme difficulty in getting the money 
to do it. 

Mr. Rich spoke of the responsibilities and.obligations of pub lie-service corporations 
in the matter of regulation and investigation and preferred a more specific complaint 
against the indiscriminate investigating of railroads for reasons of personal spite or with 
a view to making political capital. Turning to the prospect of Government ownership 
he said: 

“There is to-day a serious situation in New England. There is more than a chance 
that Massachusetts will take over the Boston & Maine Railroad. For it is not just 
Louis D. Brandeis and David O. Ives who advocate it now, but the retiring president 
of the Boston Chamber of Commerce, and that is a very different story. 

“At best, though, it is a selfish, dog-in-the-manger policy, which ignores the rights 
of sister States through which the system passes. And what if it means not State own¬ 
ership, but turning the road over to private capital? Will it be Massachusetts capital? 
The Massachusetts capitalists have not the courage to invest in New England railroads. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 145 


“mellen and state street capitalists. 

“What has caused the recent wave of criticism directed against President Charles S. 
Mellen? Mr. Mellen himself gave the answer when he said his troubles were due to 
the desire of the State Street capitalists to get a rake-off—to provide him at per cent 
with money he needed, money not their own, but secured by them in New "York at 4 
per cent. It was the commission they wanted, and their interests were purely selfish. 

“Mr. Mellen, however, stands for honesty and efficiency. Therefore he would not 
accept their offer, but went himself to New York and got the money at 4 per cent, thus 
serving the interests of all New England instead of this group, but getting the enmity 
of that group. 

“Do you want the road controlled, as it would be, by politicians at city hall or the 
statehouse? For the private capitalists would be controlled by these politicians, and 
they would have to be amenable to demands for jobs for the politicians and their 
friends. 

“We have had only one experiment with State ownership of railroads in Massachu¬ 
setts, when the State built the Hoosac Tunnel and the Hoosac Tunnel Railroad, paying 
$20,000,000 for it and later disposing of it for $10,000,000 in 3 per cent bonds. Do you 
like the sample? 

“In the close investigation of the Boston & Maine Railroad by the New Hampshire 
Legislature the investigators, hostile as they were to the road, could find only one 
contract to criticise, and that of long standing. What do you think would be the 
results of an investigation of contracts after they had been made for five years in 
City Hall or on Capitol Hill? 

“Public ownership of railroads may be practicable when our civil service is reformed 
and purified, when our politics are reformed, when the right type of man seeks public 
office, and when that public office is sought because it is a public office and not a 
private job. Even now the Government may perhaps properly take over some 
added functions of public service, but it will be a long time before the people of 
the United States should turn over to the politicians a business employing a million 
and three-quarters men—enough to keep any party in power forever.” 

BLAMES INTERSTATE BOARD. 

Referring to the admitted lack of facilities for railroads, Mr. Rich held that it 
resulted from the refusal of the Interstate Commerce Commission to let the railroads 
advance their rates enough to make the needed improvements. This, he said, dis¬ 
heartened the railroad men and frightened away the investing public. 

The courts, he added, have held that the railroads are entitled to a 7 per cent return 
on the value of their property; yet the New Haven, though paying an 8 per cent 
dividend, is getting but 6 per cent return on the value of its property, and the Boston 
& Maine, paying 4 per cent, is getting but 3. 

Mr. Horn enlarged on this same theme of the need of railroad development and 
the virtual impossibility of its accomplishment, and as evidence cited the freight 
congestion of last winter, caused by January’s low temperature. 

The drop of temperature, he said, was but 10°, but it was enough to reduce the 
capacity of the locomotives by 25 to 30 per cent. This, in turn, produced congestion 
in nearly every road east of the Mississippi, so that the New Haven, which is a 
freight-receiving and not a freight-originating road, was looking for business through 
January and until the middle of February. 

Then when the cold relaxed the freight was dumped in so fast that the road was 
overwhelmed until in early April the coal strike gave it a chance to catch up. This, 
he thought, showed how close to the limit the railroads of the country are operated, 
and he noted that the abused Boston & Maine was the only connecting road which 
gave the New Haven more freight in January, 1912, than in January, 1911. 

“Six years ago,” he said, -‘when Hill said that the railroads were ‘up against a 
stone wall.’ we were experiencing a boom. To-day there is another boom, but to-day 
men could not sell railway stocks for anything from 80 to 200 points of what they 
paid for them in 1906. One may respectfully wonder, then, what the next boom 
will do to the railroads.” 

Mr. O’Shaugnessy. I wish to introduce Mr. Frank E. Fitzsimmons, 
of Rhode Island. 

Mr. Fitzsimmons. I desire to ask your permission to file my obser¬ 
vations in type. 

The Chairman. The committee will be glad to have you do so. 

72177—13-10 


146 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT, 

Mr. O’Shaugnessy. The same privilege is asked by Mr. Alexis H. 
Boyer and Mr. Charles Broulx, selectmen, of Southbridge, Mass., who 
are in favor of the resolution. I also wish to note the appearance of 
Mr. Charles Haggerty, representing the town of Webster, Mass., in 
favor of the resolution. 

Mr. Walker. Mr. Chairman, we are prepared to explain the points 
about which you asked. 

The Chairman. We shall be glad to hear you this afternoon. 

STATEMENT OF MR. NATHAN A. BRIGGS, TREASURER, RHODE 
ISLAND BUSINESS MEN’S ASSOCIATION. 

Mr. Briggs filed the following statement: 

Mr. Chairman and Gentlemen: I am here to represent the Rhode Island Business 
Men’s Association, which consists of 400 corporations and companies from all parts 
of the State and all kinds of industry, except producing the raw material. We ship 
in the raw material and ship out the manufactured goods, so that transportation is a 
factor with us, not that we want opposition, but competition, and when the Grand 
Trunk applied for a charter for the Southern New England we lent them all the aid 
at our command, not doubting their ability and good faith that they would perform 
what they agreed to do. A great many have looked forward to just this opportunity, 
an outlet that would give us a choice of railroads, and placed Providence on the rail¬ 
road map, not that the freights would be less, but that there would be built up some 
foreign trade. We can not see why it would be a competitor with any other railroad, 
but be a benefit to other traffic associations. We looked forward for great possibilities. 

But gentlemen, we had a shock such as no other community ever had when the 
order came to abandon work on the Southern New England. It was worse than an 
earthquake. The trust had been broken, and to-day indignation stalks through 
the community. Indignation does not convey the feelings that exist. The most 
dastardly act that was ever perpetrated or was about to be on a community is the 
abandonment of the Southern New England road by some power that wished to 
strangle competition in trade and traffic. Whether that power can be brought into 
the lime light of public opinion is questioned. To follow the right of way from Palmer 
to tidewater it is simply chaos, the way it is left. It has cost millions and will cost 
millions more to put it in a safe condition. The State has made great plans for the 
terminals by giving up rights that some thought we ought not to, but not as much 
as we did for the New Haven & Hartford Railroad. We gave them all they asked 
for and now they are getting the contents of our pocketbook. 

Gentlemen, we have the finest bay in the world and the best entrance, extending 
35 miles inland. We have six lines of steamships, four controlled by the New York, 
New Haven & Hartford Railroad, one, the Colonial, starts in New York and ends in 
Providence, the Farbar Line makes Providence a call port. We have five steam 
railroads all controlled by the New York, New Haven & Hartford Railroad. We 
have some fine trolley roads, all controlled by the New York, New Haven & Hartford 
Railroad, so you see they have us bottled up. We did expect another railroad, but 
it has been strangled, by whom? The New York, New Haven & Hartford Railroad 
have had a hand in it from the first. They tried to prevent us from giving them a 
charter, then they tried to block them in Massachusetts and New Hampshire, and 
trying to block the right of way by building sheds at Woonsocket, R. I., but failed. 
Have they accomplished it now? If not, can it be prevented? We ask the question 
of public opinion and it is doubted; we asked the question of the public utilities, of 
the Interstate Commission, of the Judicial and there is still doubt and still we wonder 
at crime. Gentlemen, it is Rhode Island that is pinched to-day, but it may be Texas 
or some other State to-morrow unless we can find the remedy. The railroad kings 
and financiers are too smart for the every day merchant, and when you may not 
be able to lift Rhode Island out of the mire, you can prevent it happening to some 
other State. If a committee will investigate, they may be able to report satisfactorily 
so that the Sherman law or other law may be made to reach the octupus that has 
reached out and strangled all competition. 

Nathan A. Brigg, Treasurer. 

The committee thereupon took a recess until 2.30 o’clock p. m. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 147 


AFTER RECESS. 

The committee reconvened at 3 p. m. 

The Chairman. The committee will come to order. Mr. Buck- 
land, the committee will hear from you now. 

STATEMENT OF ME. E. G. BUCKLAND, VICE PRESIDENT OF 
THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD. 

Mr. Buckland. Air. Chairman and gentlemen, I hold in my hand 
a copy of the Grand Trunk agreement, so called; in other words, the 
document showing the relations between the New York, New Haven 
& Hartford Railroad and the Grand Trunk Railway Co. of Canada, 
which cop}^ has been received by my associate in the Attorney Gen¬ 
eral’s office this morning and was made, as I understand, from one 
of the original documents signed by Mr. Mellen, the president of the 
New York, New Haven & Hartford Railroad. 1 think it might not 
be out of place to read the agreement in order that the committee 
might be entirely apprised of its contents. 

The said agreement follows: 

Memorandum of agreement made this --day of-, A. D. 1912, by and between 

the Grand Trunk Railway Co. of Canada, representing lines operated and con¬ 
trolled by it (hereinafter referred to as the “Grand Trunk”), and the New York, 
New Haven & Hartford Railroad Co., representing lines operated and controlled 
by it (hereinafter referred to as the “New Haven”). 

(The lines above referred to as controlled by the Grand Trunk are the Central Ver¬ 
mont Railroad and its subsidiaries, and the lines controlled by the New Haven are 
the Boston & Maine Railroad, the Maine Central Railroad, and their subsidiaries.) 

Whereas the parties hereto own, operate, and control connecting systems of trans¬ 
portation, which are in general supplementary and complementary each to the other, 
and form, together, through routes for traffic; and 

Whereas there are certain relatively short lines of track belonging to each system 
which lie between lines of track of the other system, so that such other system by 
enjoying an equal use thereof can operate a continuous line of railroad without any 
detriment to the other of such intervening lines, and to their mutual advantage as 
well as to the advantage of the public they serve: 

Now, therefore, the Grand Trunk and the New Haven hereby mutually agree, for 
the benefit of themselves and the lines represented by them, as follows: 

The New Haven agrees to open joint rates and through billing in connection with 
The Grand Trunk lines, all its stations—the division of such joint rates to be committed 
to Mr. B. Campbell, representing the New Haven, and Mr. J. E. Dalrymple, repre¬ 
senting the Grand Trunk, and if they shall fail to agree a third person shall be selected 
by the chairman of the Interstate Corumerce Commission of the United States, to 
act with them, and the decision of the majority of the three, upon any detail of such 
division, shall be binding and effective upon both parties. 

These divisions shall be attached to and are made a part of this agreement. 

The point of interchange for the joint business contemplated by the parties hereto 
is designated to be White River Junction, Vt. 

This agreement contemplates the running of through trains, through cars, the 
selling of through tickets, the checking of through baggage, the through billing of 
freight, and in all respects the use of the lines of roads of the parties hereto, so far as 
the public is concerned, as if they were in reality one road; also 

The meeting of competitive conditions arising from time to time in rates and service, 
and the maintenance, so long as legally may be, of the present differential basis of 
rates now accorded to the Grand Trunk, except that nothing shall be construed to 
prevent such mod ification of said differential rates as may from time to time be agreed 
to by the Grand Trunk. 

The Grand Trunk shall cause to be granted to the New Haven lines the joint and 
equal use of the following lines of road: 

1. The joint and equal use of the line of road between White River Junction and 
Windsor, Vt., in connection with its lines north and south thereof, so that the Boston 
& Maine Railroad may have, use, and enjoy an unbroken line of railroad. 



148 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


2. The joint and equal use of the line between Swanton and Alburgh, Vt.,so that 
the Saint Johnsbury & Lake Champlain Railroad Co. may have, use, and enjoy, an 
unbroken line in connection with the Rutland Railroad. 

3. The joint and equal use of the line between Rouses Point, N. Y., and Montreal 
Quebec, so the Rutland Railroad may have, use, and enjoy an unbroken lme to 
Montreal. 

(This last to be effective only when the second party secures control of the Rutland 
Railroad and the Rutland Railroad’s present arrangement for reaching Montreal 
terminates.) 

The New Haven shall cause to be granted to the Grand Trunk lines the joint and 
equal use of the line between Windsor, Vt., and Brattleboro, Vt., in connection with 
its lines north and south thereof, so that the Central Vermont Railroad Co. may have, 
use, and enjoy, an unbroken line of railroad. 

The making of the detailed agreements, covering the joint and equal use of each 
other’s lines, above contemplated, shall be comriiitted to Mr. E. J. Chamberlin, repre¬ 
senting the Grand Trunk, and Mr. C. S. Mellen, representing the New Haven, and 
if they shall fail to agree a third person shall be selected by the Governor General of 
the Dominion of Canada, to act with them, and the decision of a majority of the three, 
upon any question relating to the details of such agreement, shall be binding and 
effective upon both parties. 

These agreements shall be attached to and are hereby made a part of this agreement. 

This agreement shall take effect upon January 1, 1913, and continue in force and 
effect for 25 years thereafter, unless modified or sooner terminated by mutual consent. 

In witness whereof the parties hereto have caused this agreement to be signed by 
their presidents, and have caused their corporate seals, duly attested by their respec¬ 
tive secretaries, to be hereto affixed on the day and year first hereinabove written. 
[seal] The New York, New Haven & Hartford Railroad Co., 

By C. S. Mellen, President. 


Attest: 

A. E. Clark, Secretary. 


Attest: 


Grand Trunk Railway Co., 
By-, President. 


■, Secretary. 


That indicates that this has been signed and sealed by the New 
York, New Haven & Hartford, but has not been either signed or 
sealed by the Grand Trunk Kailway of Canada. I will file that with 
the committee. 

Before the opening of the hearings yesterday morning I made up 
a statement indicating the position of the New York, New Haven 
& Hartford Railroad in regard to this proposed investigation. I 
understand that the Committee on Rules is the committee to which 
has been committed the resolution introduced by Representative 
O’Shaunessy in regard to investigating the relations between the 
Grand Trunk Railway, the Southern New England Railway, and 
the New York, New Haven & Hartford Railroad, and also in regard 
to certain other investigations in reference to the affairs of the New 
York, New Haven & Hartford Railroad. I understand that it is 
the scope of this committee to report back that resolution with such 
amendments as they may see fit to put into it, and to determine 
what shall be the scope of a final resolution to be passed by the 
House in regard to an investigation of this kind. Therefore, in the 
statement which I had prepared I endeavored to confine myself as 
much as possible to that particular issue, and not go into the merits 
of any investigation which might be conducted. The statement 
which I prepared and which probably some of you gentlemen have 
seen in the press, is as follows: 


So far as our company is concerned, we are entirely willing that Congress and the 
public should know all the facts regarding our relations with the Grand Trunk Railway 
Co. and the Southern New England Railway Co., its Rhode Island subsidiary. Any 




UST. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 149 

investigation to that end ordered by Congress will receive all the help that lies in our 
power. 1 

The relations between the New York, New Haven & Hartford Railroad Co. and New 
England steamship lines are now the subject of a special inquiry by the Committee on 
Merchant Marine and Fisheries under a resolution of the House of Representatives 
passed at its last session. The New York, New Haven & Hartford Railroad Co. and 
all ol the steamship lines owned, operated, or controlled by it have made full returns 
as required by this committee, besides which we expect to make a further statement 
to me committee when the committee is ready to hear us. 

The financial condition of the New York, New Haven’& Hartford Railroad Co. is 
now under investigation by the Interstate Commerce Commission. For nearly two 
months a corps of examiners has been in New Haven at our general offices examining 
our books and records, acting under the orders of the commission, with a view to deter¬ 
mining everything pertaining to the investments of our company in the stocks and 
securities of other companies. Moreover, a similar investigation was undertaken at 
great length about two years ago by the Commonwealth of Massachusetts, through a 
special board appointed by the legislature. This commission, after six months work, 
With a large force of trained men and at an expense involving approximately $100,000 
mecl its report on February 15, 1911. It made a most searching investigation of all 
ot the securities and other property of the company and made a report indicating a 
JonY 6 ! °* asse ^ s aggregating $495,759,638.01, as against aggregate liabilities of 
$394,147,563.63, showing an excess of assets over liabilities of $101,612,074.38. 

The affairs of the Boston & Maine Railroad have been under investigation for more 
than a year by the public service commission of New Hampshire, and a report favor- 
able m most respects to that company and to its present administration was made 
public the first of this month. 

The passenger and freight service and rates applying to the same are now the subject 
of an investigation by the Interstate Commerce Commission, which investigation was 
started the 1st of last July. Four hearings have already been held and another is 
appointed for the latter part of this month. The scope of this investigation has also 
included the character of the New Haven’s and Boston & Maine’s equipment, yards, 
terminals, track; in fact everything having to do with the service rendered by these 
companies. 

. The Interstate Commerce Commission and the public utilities commission of Connec¬ 
ticut have also made an exhaustive investigation of the company’s track and roadbed 
and each commission has made its report thereon. 

In view of these investigations to which the company has been and is being sub¬ 
jected, it would seem unnecessary to duplicate the work and again require testimony 
to be produced which is now on record and open to the examination of any who care 
to make inquiry. It would, therefore, seem that the time of the committee could be 
saved if the scope of the investigation were limited to the relations of the New York, 
New Haven & Hartford Railroad Co. to the Grand Trunk. In this, as I have said, 
the committee will have all of the help which we can give it. 

Washington, D. C., December 9 , 1912, 

Now, in regard to the scope of the resolution, I call the committee’s 
attention to this wording—this is House resolution 587, passed at the 
Sixty-second Congress, second session: 

Resolved , That the Committee on the Merchant Marine and Fisheries be, and is 
hereby, empowered and directed to make a complete and thorough investigation of the 
methods and practices of the various ship lines, both domestic and foreign, engaged in 
carrying our over-sea or foreign commerce and in the coastwise and inland commerce, 
and the connection between such ship lines and railroads and other common carriers, 
and between such lines and forwarding, ferry, towing, dock, warehouse, lighterage, 
or other terminal companies or firms or transportation agencies, and to investigate 
whether any such ship lines have formed any agreements, understandings, working 
arrangements, conferences, pools, or other combinations among one another, or with 
railroads or other common carriers, or with any of the companies, firms, or transporta¬ 
tion agencies referred to in this section, for the purpose of fixing rates and tariffs, or of 
giving and receiving rebates, special rates, or other special privileges or advantages, 
or for the purpose of pooling or dividing their earnings, losses, or traffic, or for the pur¬ 
pose of preventing or destroying competition; also to investigate as to what methods, 
if any, are used by such ship lines, foreign or domestic, and railroads and other com¬ 
mon carriers, or of any of the companies, firms, or other transportation agencies referred 
to in this section, to prevent the publication of their methods, rates, and practices in 
the United States; also to investigate and report to what extent and in what manner 


150 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


any foreign nation has subsidized or may own any vessels engaged in our foreign com¬ 
merce; also to investigate and report to what extent any vessel lines and companies, 
or any of the companies, firms, or transportation agencies referred to in this section, 
engaged in our foreign or coastwise or inland commerce, are owned or controlled by 
railway companies, by other ship lines or companies, or by any of the companies, 
firms, or transportation agencies referred to in this section, or by the same interests 
and persons owning or controlling railroad companies, ship lines, or other common 
carriers, or any of the companies, firms, or transportation agencies referred to in this 
section; and said committee shall further investigate whether the conduct or methods 
or practices of said foreign steamship lines are in contravention of our commercial 
treaties, or in violation of our laws, and what effect said methods and practices have 
on the commerce and freight rates of the United States; and shall further investigate 
what effect such combinations, agreements, understandings, working arrangements, 
and practices of railroads and our coastwise and inland shipping lines, or of railroads 
and such shipping lines and any of the companies, firms, or transportation agencies 
referred to in this section, or of railroad and over-sea shipping lines, whether domestic 
or foreign, if any are found to exist, have on the commerce and freight rates of the 
United States, and whether the same are in violation of the laws of the United States. 

Sec. 2. That said committee shall report to the House all the facts disclosed by said 
investigation and what legislation, if any, it deems advisable in relation thereto. 

Sec. 3. That said committee, or any subcommittee thereof, is hereby empowered 
to sit and act during the sessions or recess of Congress at such place or places as may 
be found necessary and to require the attendance of witnesses, the production of books, 
papers, rates, tariffs, and other documents, by subpoena or otherwise, to swear such 
witnesses and take their testimony orally or in writing. 

Sec. 4. That said committee is hereby authorized to employ such counsel and 
experts and clerical and other assistance as shall be necessary to perform its duties 
hereunder. 

Sec. 5. That the Speaker shall have authority to issue subpoenas for witnesses, upon 
the request of the committee, during the recess of Congress in the same manner as 
during the sessions of Congress. 

Mr. Hardwick. Now, that would dispose of only one thing in the 
O’Shaunessy resolution, to wit, that part of the O’Shaunessy resolu¬ 
tion which undertakes to investigate your connection with steamship 
transportation ? 

Mr. Buckland. And it was to that I was addressing my remarks. 

Mr. Hardwick. Of course, that would seem to cover that line thor¬ 
oughly—the resolution now passed ? 

Mr. Buckland. Yes, sir. Therefore it seems to me that that part 
of the O’Shaunessy resolution has now been referred to a committee 
and that committee has full jurisdiction over our relations with 
steamship lines. 

I refer for these figures to the report of the joint commission on the 
New York, New Haven & Hartford Railroad, 1911, by Mr. MacLeod, 
chairman of the Massachusetts railway commission, pages 136 and 
137. A copy o{ that report will be hied. In the determination of 
the valuation I quote from the report of this commission, which, as 
Mr. MacLeod said, was composed of the board of railroad commis¬ 
sioners, three in number, the tax commissioner, and the bank com¬ 
missioner, appointed for the purpose of determining whether the 
securities of the New York, New Haven & Hartford Railroad were 
proper savings-bank investments. It may not be improper to say 
that something more than a year prior to the initiation of this inves¬ 
tigation by the State of Massachusetts, Mr. John F. Stephens, at one 
time the engineer on the Panama Canal, was employed by the New 
York, New Haven & Hartford Railroad to make an appraisement of 
its property, and the report which he made indicated a valuation of 
our property at about $25,000,000 less than the valuation which was 
arrived at by the Massachusetts commission. In other- words, the 
Massachusetts commission, without going over Mr. Stephens’s 


1ST. Y., N. H. & HAETFOBD AND GEAND TEUNK E. E. AGBEEMENT. 151 


appraisement, raised his valuation $25,000 000, although in that 
valuation they depreciated the present value of the property—the 
present replacement value of the property—by charging for depre¬ 
ciation for obsolescence, or age, or other things which wear and tear 
indicate upon a going property. 

Mr. MacLeod. Mr. Chairman, I would like to correct a statement 
that was made. The valuation commission did not sanction any 
special valuation of the New York, New Haven & Hartford assets. 
There were certain reports made bjr experts employed by that board 
which indicated a certain value, but the commission itself was care¬ 
ful not to pass upon the definite matter of values, but ruled that on 
general matters the assets of the company were in excess of its lia¬ 
bilities. That was all that was included by the scope of its inquiry. 

Mr. Buckland. I did not mean to say that the Massachusetts 
commission adopted or did not adopt Mr. Stephens’s valuation. I 
did mean to say that as a result of their own valuation they arrived 
at a report which indicated an excess of $25,000,000 more than that 
reached by Mr. Stephens, as a mathematical proposition. 

Mr. MacLeod. Well, assuming that the board accepted responsi¬ 
bility for the report made to the board by certain experts employed 
by it, that might follow; but while I was not a member of that com¬ 
mission at that time, I am very well acquainted with what was done 
from conferences held with the other members of the commission who 
were on that board. They stated that they advisedly declined to sanc¬ 
tion—to give their official sanction to the reports that were made to 
them by the experts which they employed further than to express 
themselves as being satisfied that the assets as a whole were in excess 
of the liabilities; that it was not the intent of that commission to lay 
down any express figure as representing the valuation of the assets of 
the New York, New Haven & Hartford Railroad Co. Various 
demands were made to have that done, but the commission declined 
to do so. 

Mr. Buckland. Perhaps it would be just as well, then, as long as 
there is a little issue between us, to read this from page 23, and also 
at page 24: 

The accompanying reports indicate a value of assets very largely in excess of capital 
stock and indebtedness, and in connection with the report of its doings under the act 
the commission has deemed it proper to submit these reports in full. While of neces¬ 
sity questions of value are to a considerable degree matters of judgment, the commis¬ 
sion is content with a declaration that while its judgment is not necessarily in accord 
with that of experts, the excess of assets over all liabilities is sufficiently ample to 
warrant the finding made in the certificate under the terms of the act. 

It is to be further observed that under the terms of the act the rule established by 
the general court for the proceedings by the commission was the ascertainment of the 
aggregate corporate assets for the sole purpose.of determining whether the same are 
sufficient to secure the outstanding capital stock and indebtedness of the company. 
The word “assets” is of sufficiently broad definition to include the entire property of 
all sorts belonging to a corporation; and would permit the commission to appraise the 
value of intangible assets, so called, including all the franchises of the corporation, 
together with its value as a going concern. A discussion of this aspect of the valua¬ 
tion will be found in Prof. Swain’s report. 

Without undertaking to place a value for any purpose upon such intangible assets, 
it is enough to say that taken together their value would be very large. The monopo¬ 
listic character of the New York, New Haven & Hartford Railroad Co.’s system, the 
densely populated districts which it serves, the very large number of industrial and 
commercial enterprises along its lines and in the vicinity, and the efficiency of the 
management of the company are factors, although not exclusive ones, that, it will be 
readily conceded, make for values of an intangible character. 


152 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Now, while what Mr. MacLeod says is strictly true in regard to 
the commission arriving at any specific figure and indorsing any 
specific figure, nevertheless, on page 136, from which I read the 
figures, is contained the report of Prof. George W. Swayne, of the 
Massachusetts Institute of Technology, to whom was committed by 
this commission the task of making the appraisement, and I have 
reason to assume that if they had not agreed with him they would 
have criticized his report. 

The Chairman. Is there anything in that report controverting the 
estimate made by Mr. Stevens? 

Mr. Buckland. No, sir, there is nothing. On the contrary, in 
order to save your time I did not read the- 

The Chairman (interposing). I was just putting it in a negative 
Way to determine whether they took any issue with Mr. Stevens. 

Mr. Buckland. On pages 24 and 25 I read: 

In closing this branch or division of the report the commission desires to make its 
acknowledgments to all the gentlemen who have been associated with it in its investiga¬ 
tion, and also to the management of the New York, New Haven & Hartford Railroad 
Co. for its cooperation; and to recognize the value of the appraisals of John E. Stevens, 
operating vice president of the company, and the reports of Price, Waterhouse & Co., 
chartered accountants, of New York. 

Mr. Lenroot. This was the commercial value ? 

Mr. Buckland. Yes, sir; this was the commercial value. 

Mr. Lenroot. Was Mr. Stevens’s valuation commercial value? 

Mr. Buckland. Yes, sir. 

Mr. Lenroot. Was there a difference—a wide difference—between 
the replacement value and the commercial value? 

Mr. Buckland. Perhaps I misunderstand what you mean by 
commercial value. As nearly as I can explain it*, it was a replace¬ 
ment value, less depreciation due to obsolescence. 

Mr. Lenroot. That is right; that was my question. 

Mr. Buckland. Yes. That is what I referred to in that part of 
my statement which I last read. I have here and would like to file 
the report of the New Hampshire public service commission on tHe 
affairs of the Boston & Maine Railroad. 

I read from Volume I of the testimony offered before Chairman 
Charles A. Prouty, of the Interstate Commerce Commission, at the 
hearing held in Boston July 1 and 3, 1912. I read from Mr. Prouty’s 
statement: 

Chairman Prouty. The docket number of the case that has been assigned for inves¬ 
tigation this morning is 4845, in the matter of rates, classifications, regulations, and 
practices of certain carriers. 

This proceeding is really an investigation into general railroad conditions in New 
England. 

Since the taking over of the Boston & Maine Railroad by the New York, New Haven 
& Hartford Railroad, especially since the New Haven road came into the virtual 
management of the Boston & Maine road, the commissionhas received a great many 
complaints, usually as to the service, and the allegation has been that this was due 
in some way to the merger. 

In consequence of these complaints, some six months ago we sent an agent into New 
England with instructions to investigate the situation and report. His report revealed 
a condition of things which led us to believe that an investigation ought to be made. 

The railroad transportation of New England has come to be almost a complete 
monopoly. There is no other part of this country, where the same territorial extent 
and the same commercial interests are involved, in which the same condition of mo¬ 
nopoly exists. 

It is a grave question as to whether conditions under that state of monopoly will be 
or can be as favorable as where competition exists. 



N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 153 


. The investigation which the commission proposes to undertake will finally divide 
into three general heads. There will be: 

First, the financial aspects of the subject. 

"We propose to trace the history of the various combinations, absorptions, and leases 
by which this monopolistic condition has been brought about. That information we 
can obtain largely from the reports to the commission, from financial publications, 
and, to some extent, perhaps from oral testimony. 

There is, second, what may be termed the traffic aspect of the question: The inquiry 
how the rates, practices, and regulations in New England compare with those in other 
parts of the country where transportation conditions are somewhat the same as here. 
That information the commission has in the tariffs on file with it at Washington. 

There is, third and finally, the question of service. How does the service which is 
rendered the public here compare with that elsewhere? 

Upon that point the commission is dependent, of course, upon the shippers. We 
must inquire of them what the service is, whether satisfactory or unsatisfactory, and 
the reason for the condition. 

At this hearing, ending on July 3 and adjourned to some date in 
September upon the suggestion of the chairman, the conditions of 
service were noted. About two months were consumed by my asso¬ 
ciate, Mr. Perry, in preparing a statement showing what that service 
was. I am only saying these things to you to show how much we 
have been investigated, and to prove what I said to Congressman 
Murray this morning, that we have been investigated for about six 
years and that there ought to be some limit to this investigation. 
On July 11, 1911, a most distressing wreck occurred upon the New 
1 ork, New Haven & Hartford Railroad at Bridgeport, caused, as 
the inspector of the commission found and the commission confirmed, 
by disregarding the signals and by too fast running over crossings. 
The report of that commission indicated that the track, roadbed, 
signals, and other equipment of the New York, New Haven & Hart¬ 
ford Railroad were in a perfect condition. Another wreck occurred 
on October 3, 1912, at Westport, Conn. The findings of the com¬ 
mission—by the way, if Mr. Perry will be kind enough to file that I 
will be very glad. Herein, gentlemen, I will answer these statements 
that have been made in reference to the roadbed, by citing the doc¬ 
umentary evidence. On page 2 of the report I read the following: 

This part of the New York, New Haven & Hartford Railroad is a four-track road. 
The rails weigh 100 pounds to the yard and are laid on oak, chestnut, and creosoted 
pine tires, there being about 18 ties under each rail. Rock ballast is used, and the 
roadway at this point is in good condition. The accident occurred at the beginning 
of a curve 1° 6 / leading to the left. There is a descending grade for west-bound trains 
of 0.07 per cent. Approaching the scene of the accident from the east, the track is 
straight and the view is unobstructed for more than 1 mile. Train movements are 
governed by signal indications, and train orders are not used (except in the case of 
moving a train against the current of traffic), the road being equipped with controlled 
manual block signals, which the evidence and investigation show were in proper 
working condition. Enginemen can tell by the signals displayed which track their 
train will use, whether it shall stop, proceed on the same track, or be diverted to 
another track. 

At Westport there is a tower equipped with a 40-lever mechanical interlocking 
plant, with 4 controlled manual block instruments, 15 electric locks, 6 signal repeaters, 
and 6 bells. The switches governing crossover movements are controlled from this 
tower by means of the interlocking mechanism, and are interlocked with the block 
signals. A careful examination of this interlocking plant was made after the accident. 
The circuit plans, locking sheet, and dog chart were checked with the plant as 
installed, and the operation of the signals and locks fully tested. Everything con¬ 
nected with this plant was found in proper condition, and there was nothing to indi¬ 
cate that it would have been possible for the engineman on train second No. 53 to 
have been misled by improperly displayed signals. 


154 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Mr. Buckland. On page 8 I read this: 

As previously noted, the roadway and track conditions in the vicinity of the acci¬ 
dent are good. The construction of the crossover was substantial. All renewals are 
made with creosoted ties, and on these ties tie plates are used as well as screw spikes. 
In some places the chestnut ties are badly worn, due to the face of the rail cutting 
into them, in some instances to a depth of three-fourths ctf an inch, but a sufficient 
number of tie-plated creosoted tires are in use to maintain safe track. At the cross¬ 
over practically all the ties were new and screw spikes were used, and the track con¬ 
ditions at this point were good. 

The Chairman. What do you read from ? 

Mr. Buckland. From the report of the Interstate Commerce Com¬ 
mission, by Mr. McChord, commissioner, on the investigation on the 
New York, New Haven & Hartford Railroad wreck at Westport, 
Conn., October 3, 1912. 

Mr. Lenroot. Did they find any cause ? 

Mr. Buckland. The cause was identically the same as the cause 
of the Bridgeport wreck, an engineer running through a crossover at 
a high rate of speed. The Bridgeport wreck occurred on the Federal 
Express, about 3 o’clock in the morning, and there were no witnesses 
to that wreck except the tower operator, who saw the train coming. 
The Westport wreck occurred about 4.30 in the afternoon, and 
there were 20 or 30 or 40 witnesses in two work trains near by, 
so that we knew exactly what happened at the Westport wreck, 
although we could only surmise what happened at Bridgeport. I am 
giving you this documentary statement, the official Interstate Com¬ 
merce Commission report, in view of all the statements that are 
going around in regard to the conditions of our track and roadway. 

On November 15 our Merchants’ Limited was derailed at a place 
called Green’s Farms—the west-bound train. The cause of the 
derailment I will read from a report of the inspector of the Connect¬ 
icut public utilities commission. I can not give you this as official, 
although I have every reason to belive it is, because I believe it is 
correctly quoted: 

Chief Engineer Elwell, of the public utilities commission, in his report of an inquiry 
into the wreck of the Merchants’ Limited Express over the New York, New Haven & 
Hartford Railroad, at Green’s Farms, on November 15, filed to-day, attributes the 
cause to a broken equalizer bar on a diner, which, dragging through a switch, dis¬ 
arranged the points and derailed the cars next following. Mr. Elwell said that marks 
of the dragging broken bar were discernible on the roadbed before the switch was 
rached. He finds that the rails, ties, and switch fastenings at the point of wreck were 
in good condition. He says that at a joint hearing with the Interstate Commerce Com¬ 
mission it was conclusively shown that the defect in the equalizer drawbar could not 
have been seen at any car inspection. Mr. Elwell’s recommendation is that railroad 
companies frequently make special examinations of equipment with a view to locat¬ 
ing defects in metal parts. 

At a joint investigation held with the Interstate Commerce Commission in New 
Haven on November 20, all testimony was to the effect that the equalizer bar broke 
on account of a flaw in the metal, which was so covered by the pedestal casting and 
the journal box that it could not have been discovered by any car inspection without 
removing the bar itself from the truck, and even then might have escaped detection. 

Gentlemen of the committee, I might stop ncre and say no more, 
because I can not amplify our position any further if it were not for 
the fact that there have been statements made before the committee 
which I think should not go unanswered. They have nothing to do 
with the subject before the committee, whose duty will be limited in 
developing the scope of the resolution. Therefore I will take up some 
points which have been made and endeavor to answer them in a 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 155 

manner which I think will bear investigation, because I shall refer 
to documents wherever I can. 

First, to those of you gentlemen who do not live in our part of the 
country, I wish to say that the New York, New Haven & Hartford 
Railroad Co. is a company, 65 per cent of whose stock is owned in 
Massachusetts, Rhode Island, and Connecticut, about 30 per cent in 
New York, and about 5 per cent elsewhere. The control of the road 
is absolutely in southern New England, and the character of the 
stockholdings is such that it has been favorite stock for trustees, 
women, and children, and those desiring a safe and conservative 
investment. The securities other than stocks are largely invested 
in by the savings banks of New England. The stockholders annually 
elect a board of 27 directors, 14 of whom are, according to the charter 
of the company, required to be residents of the State of Connecticut; 
that is, a majority are required to be residents of that State. There 
are 4 directors in Massachusetts, 1 in Rhode Island, 4 in New York, 
and 2 in Pennsylvania. That indicates the distribution of the direc¬ 
tors. The directors are, I think I may say without exception, men 
who have made good in New England. There is Mr. Theodore N. 
Vail, the president of the American Telephone & Telegraph Co.; 
there is Mr. Alexander Cochrane, of Boston, the president of the 
Cochrane Chemical Co.; Mr. Sidney Winslow, living in or near 
Boston, president of the United Shoe Machinery Co.; and Mr. William 
Skinner, president of the Skinner Manufacturing Co., all living in 
Boston. 

In Rhode Island Mr. Robert W. Taft, president of the Merchant’s 
National,Bank, treasurer of the Coventry Co., a man born and raised 
in Rhode Island, the son of a distinguished governor of that State. 
In Connecticut such men as Mr. Charles F. Brooker, of the American 
Brass & Copper Co.; Mr. Maxwell, of the Rockville Woolen Manufac¬ 
turing Co.; Mr. A. F. Warner, of the Warner Corset Co., and Mr. 
Hemingway, the president of a bank; and so on. I might go through 
the whole list of directors, and in every case you will find them to be 
men who have made good among their friends and neighbors, stock¬ 
holders and directors of this road. 

I say this to you, gentlemen, because we have heard so much in 
these days of absentee ownership. The directors of the New York, 
New Haven & Hartford Railroad Co. are scattered all over its terri¬ 
tory and are the representatives to whom the people having grievances 
against that company can go at any time because they are their 
friends and neighbors, and if there ever was a case opposite to absentee 
ownership, it is the case of the New York, New Haven & Hartford 
Railroad Co. 

The compan}^ began by the merger in 1872 of two comparatively 
short lines of railroad. The Hartford & New Haven Railroad, run¬ 
ning from Hartford about 60 miles from New Haven and Springfield, 
and the New York & New Haven Railroad, running from New York 
to New Haven. After that they further acquired the New Haven, 
Northampton & Naugatuck, the" shore line and the air line railroad, 
all of them properties radiating from New Haven as a center. - As the 
years went on the New Haven extended its line by acquiring the New 
York, Providence & Boston Railroad Co. and by leasing the Old Col¬ 
ony Railroad, which, with the Boston & Providence, allowed it to get 


156 N. Y v N. Ii. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

into Boston. All of these purchases were done by and with the assent 
of the legislatures of the various States through which these roads ran. 

For many years the Old Colony Railroad Co. had acquired roads in 
the State of Massachusetts. For many years acquisitions of trackage 
had been made in the State of Massachusetts by and with at least the 
tacit acquiescence of the Massachusetts authorities, so that when the 
question arose in regard to the New York, New Haven & Hartford 
Railroad Co. acquiring the Boston & Maine Railroad Co., that was the 
situation. Now a reference was made to what was afterwards truly 
deemed to be a violation of the law, but which was simply what had 
been undertaken years before and had always been acquiesced in and 
recognized. I do not say this by way of defense, but by way of expla¬ 
nation. Every man is supposed to know the law, even though he may 
have made a mistake in doing what he did. 

So it was with reference to the acquisition of the trolley lines. It 
is true the laws of Massachusetts forbade the acquisition of other 
corporations, but it is also true that the New Haven Road had, in the 
first place, believed itself to be a Connecticut corporation and not a 
Massachusetts corporation, until it was finally held to be a Massa¬ 
chusetts corporation by the Supreme Court. I do not say that in 
defense, but only by way of explanation. 

Whatever may be said in reference to the acquisition by the New 
York, New Haven & Hartford Railroad Co. of steam or trolley prop¬ 
erties in the State of Massachusetts, it is true that that matter was 
settled, and I hope settled finally with the authorities of Massachu¬ 
setts when the Boston Railroad Holding Co.’s charter was passed. 
I could quote at length from this report in reference to the Boston 
Railroad Holding Co., but suffice it to say that that was a company 
which was organized after a full discussion by the legislature of 
Massachusetts to hold the stock of the Boston & Maine Railroad 
with the understanding that that stock should not be disposed of 
excepting with the acquiescence of Massachusetts, and that Massa¬ 
chusetts can, at its discretion, take over the stock of that company, 
and take over the Boston & Maine Railroad. That was the settle¬ 
ment of the various issues between the New York, New Haven & 
Hartford Railroad Co. and the Commonwealth of Massachusetts, 
and it seems to me that that settlement might be permitted to rest 
where it is, rather than gentlemen going into criminations and recrim¬ 
inations, as was done yesterday upon matters which were settled by 
the Commonwealth with one of its corporations. 

Mr. Hardwick. In the settlement of this question, were there any 
matters in violation of the Federal laws; I mean were any such 
matters involved in this settlement? 

Mr. Buckland. I assume not. 

Mr. Hardwick. Why not? Were there no Federal statutes that 
forbade that sort of thing? 

Mr. Lenroot. Was there not a Federal suit pending at that time? 

Mr. Buckland. My recollection of the situation was this: I have 
not the documents here, but I think the complaint which Mr. White 
filed yesterday will indicate the situation. The New York, New 
Haven & Hartford Railroad Co. had not, at the time the Federal 
suit was brought, acquired the Boston & Maine Railroad. The par¬ 
ticular thing complained of was the acquisition of certain trolley 
properties by the New York, New Haven & Hartford Railroad Co., 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 157 

and Mr. White to the contrary notwithstanding, my recollection is 
that the only interstate trolley owned by the New York, New Haven 
& Hartford Railroad Co., directly or indirectly, was a road running 
from Pawtucket, R. I., to Attleboro, Mass., a distance of 8 miles, 
operating under the corporate name of the Interstate & Consolidated 
Street Railway Co., and without knowing certainly, it is my impres¬ 
sion that the Attorney General, in dismissing that suit found there 
was no competition which could be affected. 

Mr. Hardwick. He did not find that with reference to the Boston 
& Maine ? 

Mr. Buckland. I think the Boston & Maine was not owned at 
that time by the New York, New Haven & Hartford Railroad. 

Mr. Hardwick. Whatever they did, did they not acquire it in 
violation of the Federal law? 

Mr. Walker. A bill was passed with reference to the consolida¬ 
tion between the Boston & Maine and the New York, New Haven 
& Hartford Railroad. 

Mr. Buckland. That was in regard to the proposed consolidation, 
not the actual consolidation. 

Mr. Hardavick. I understood you to say just a moment ago 
that no one had a right to complain because the States had acquiesced 
in this; that Massachusettes had, for instance, acquiesced in the 
acquisition of the Boston & Maine Railroad by your company. Even 
if Massachusetts did acquiesce in it, and it was in violation of the 
Federal statute, that would be a different proposition. 

Mr. Buckland. Assuming that you are correct, Mr. Hardwick, 
in your statement, there is only one answer to the question. It is 
that the assumption was that the acquisition of the Boston & Maine 
Railroad is not in violation of the Federal statutes- 

Mr. Hardwick. Because it is not a competitor ? 

Mr. Buckland. Not a substantial competitive line. 

Mr. Hardavick. I understood one gentleman here to say there 
were at least 30 places where it was competitive in the one State of 
Massachusetts. 

Mr. Buckland. The points of competition are shoAvn upon the 
map here before you, and they are Boston, Lowell, Fitchburg, 
Springfield, Holyoke, Northampton, Turners Falls, and Shelburne 
Falls. 

Mr. Hardwick. So that you then question the accuracy of that 
statement ? 

Mr. Buckland. I think it is not correct. 

Mr. Lenroot. Was not Worcester a competitive point? 

Mr. Buckland. Yes, that makes nine. 

Mr. Hardwick. Do you not consider it pretty general competi¬ 
tion when you have competition in nine of the great cities of Massa¬ 
chusetts ? 

Mr. Buckland. I think the evidence will show that whatever 
competition there is, is rather incidental competition, and confined 
to intrastate business. I think it is a very serious question to say 
as to whether or not that competition is not within* the meaning of 
the law, since the recent Supreme Court cases. 

Mr. Hardwick. You mean since the Union Pacific case has been 
decided ? 



158 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Buckland. Yes; the recent Supreme Court decision. Put 
yourselves back into the place in which we were at the time this was 
done, and you can see what we had to contend with. 

Mr. Hardwick. So that you by no means conceded it then, as you 
do not now ? 

Mr. Buckland. That is it. 

Mr. Hardwick. You say, as far as the Commonwealth of Massa¬ 
chusetts, at least, is concerned, she ought to be estopped from making 
this point. Is that the idea ? 

Mr. Buckland. No. My argument was particularly directed to¬ 
ward meeting the statements made here yesterday, statements of 
a lot of things which took place prior to our arranging our difficul¬ 
ties with the State of Massachusetts. It is as if two men had 
gotten together and agreed that whatever has taken place back of that 
agreement is perfectly wiped out. I will leave that subject with 
this statement: That I am fully convinced that any terms which 
Mr. Mellen made to the legislature or other properly constituted 
authority of Massachusetts in reference to the acquiring of any 
properties were carried out in the fullest faith, and if your committee 
or any committee appointed to investigate this matter has any 
doubt about it, Mr. Mellen will cheerfully appear before this com¬ 
mittee and give his own statement in regard to it. 

Mr. Garrett. It seems that Mr. White, however, yesterday did 
point out some specific instances of acquiring properties. Did you 
make a note of that ? 

Mr. Buckland. I did. 

Mr. Garrett. What have you to say of those instances ? 

Mr. Buckland. Personally I do not know, except as I have talked 
with Mr. Mellen in regard to the statement Mr. White has made. I 
was engaged at the other end of the line, and I do not know specifically. 
Mr. Mellen has told me over and over again that he has kept the 
fullest faith with the legislature of Massachusetts, and he is willing 
at any place and time whatsoever to prove that to the satisfaction 
of any committee. 

Mr. Garrett. My recollection is that Mr. White stated yesterday 
that after that agreement had been entered into the Boston & Maine 
Was acquired. 

Mr. Buckland. My recollection of it is—and I only say this per¬ 
sonally, not speaking by authority—that the only statement which 
Mr. Mellen made, and the only statement which Mr. White claimed 
he made was that with reference to the acquisition of the trolley 
property. I give that as my guess of the matter. I am not com¬ 
petent to talk about it, because Mr. Mellen is more competent than I. 

Mr. Lenroot. I have before me what purports to be the letter of 
Mr. Choate, reading this way: 

Mr. Mellen authorized Mr. Choate to state to the legislature that they will not 
enter upon further acquisitions in Massachusetts other than those already contracted 
for, or build any trolley lines except such as are now under actual construction, until 
such times as the merger question has been settled. Mr. Mellen is willing, if the 
committee desires it, to furnish a list of the properties already contracted for or under 
construction, to avoid any future misunderstanding. 

Mr. Hardwick. Did not that relate to the general subject matter 
of the acquisition of the trolleys % 

Mr. Lenroot. That is a letter. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 159 


Mr. Buckland. I would rather you would take the testimony from 
Mr. Mellen direct when the time comes, and say nothing in regard to 
it. Considerable testimony has been offered here in regard to the 
ownership of steamship lines by the New York, New Haven & Hart¬ 
ford Railroad Co.; upon that I wish to state briefly as follows: I have 
made this statement to the Commissioner of Corporations, to the 
Interoceanic Canal Committee of the Senate, and I now make it to 
this committee. 

The original lines of steamboats were, with one or two exceptions, 
built by the constituent roads now making up the New York, New 
Haven & Hartford Railroad Co. in order to give them entrance into 
New York City. 

Put yourself back to the conditions of things in 1807 when Fulton 
discovered the steamboat, and you will find that radiating out from 
New York were a series of highways, connecting what were the princi¬ 
pal cities then and what are the principal cities now of New England. 
When the steamboat came it displaced the wagon and the coach 
which ran parallel to it, and therefore we find very early in the 
history of New England that steamboats ran from New York east¬ 
ward and touched at all points on Long Island Sound and Narra- 
gansett Bay. When the railroad was invented in 1832, or the first 
railroad built in New England in 1832, it was presumed for a time 
that a railroad could compete with a steamboat line, and you will 
therefore find that most oi the railroads in New England were built 
at right angles to the steamboat lines, running in a north and south 
direction. I call attention to the Boston & Providence Road built in 
1833, to the Norwich & Worcester road, built in the early forties, run¬ 
ning from Norwich to Worcester, to the Hartford & New Haven 
road, running from New Haven to Hartford, which was built some 
years before the*New York & New Haven, all because it was supposed 
that a rail line could successfully compete with a steamboat line. 
Therefore those rail lines early became coadjutors of the steamboat 
lines, and not competitors. 

The Old Colony Railroad Co., running from Boston to Fall River, 
built a line of boats and incorporated the Old Colony Steamboat Co., 
to deliver its goods into New York in that way. The Providence & 
Stonington Steamship Line was similarly constructed by the New 
York, Providence & Boston Railroad Co., to deliver goods coming 
from Boston to New York by way of Stonington and Providence. 
The Norwich & Worcester Railway Co. similarly built boats to run 
on that Norwich line under the corporate name of the Norwich & New 
York Transportation Co. The Hartford & New Haven road was 
similarly allied with the New Haven Steamboat Co., which carried 
its goods into New York. Before the Hudson River road was built 
a steamboat line from New York to Bridgeport carried its goods to 
Albany by way of the Housatonic road, up to Albany. That was the 
origin of the steamboat lines of New England. They were built by 
us, they belong to us, we made the business which those lines carry 
to-day. We have always given on all commodities and on most 
classes of traffic a differential, a lower rate by way of the steamboat 
lines than by way of the all-rail lines. So that to-day shippers in 
New England can load their goods onto steamboat lines and carry 
them for a lower rate and have them delivered into New York more 
quickly and at more advantageous places than by the rail lines. 


160 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

In the hearings before the Committee on Interoceanic Canals of 
the United States Senate, on page 703, in answer to a question of 
Senator Townsend, I made the following statement, correcting an 
error which I had made before: 

Mr. Campbell advises me that I was in error in making that statement; and I wish to 
file here a schedule of our class and commodity rates, showing that the class rates by 
water are 3 cents per 100 pounds, or 60 cents per ton on the average, cheaper than the 
all-rail rate, and the commodity rates are 11 cents per 100 pounds, or $2.20 per ton, 
cheaper than the all-rail rates. 

The statements submitted are as follows: 

Class rates. 


Between New York and— 

1 

2 

3 

4 

5 

6 

Bridgeport: 

Water. 

14 

11 

8 

7 

6 

5 

Rail. 

17 

15 

12 

9 

8 

8 

NewHaven: 

Water. 

16 

13 

11 

8 

7 

6 

Rail. 

19 

16 

14 

11 

10 

9 

New London: 

Water._. 

20 

17 

14 

12 

10 

9 

Rail. 

22 

19 

16 

13 

11 

10 

Providence: 

Water. 

27 

23 

18 

16 

14 

12 

Rail. 

31 

27 

22 

18 

17 

15 

Pall River: 

Water. 

27 

23 

18 

16 

14 

12 

Rail. 

32 

29 

24 

18 

17 

15 

Newport: 

Water. 

27 

23 

18 

16 

14 

12 

Rail. 

32 

29 

24 

18 

17 

15 

New Bedford: 

Water. 

27 

23 

18 

16 

14 

12 

Rail. ......... 

32 

29 

24 

18 

17 

15 

Boston: 

Water___ 


29 

24 

18 

17 

14 

12 

Rail. 

34 

29 

23 

19 

17 

15 

Rail and water. 

34 

29 

21 

19 

16 

14 



Commodity rates. 


Between New York and— 

Cotton 

piece 

goods. 

Woolens. 

Boots 

and 

shoes. 

Dry 

goods. 

Lowell: 





Rail. 

25 

35 

35 

35 

Rail and water. 

15 

15 

30 

26 

Fall River: 





Rail. 

24 

32 

32 

32 

Rail and water. 

11 

14 

24 

19 

Worcester: 





Rail. 

21 

32 

32 

32 

Rail and water. 

13 

15 

25 

20 

Brockton: 





Rail. 

24 

32 

32 

32 

Rail and water. 

12 

15 

25 

20 

Watuppa: 





Rail. 

24 

32 

32 

32 

Rail and water. 

11 

14 

24 

19 


I file here a schedule of our water rates, water or rail rates, to and 
from New England points. 

Mr. Hardwick. Is it the contention of the New York, New Haven 
& Hartford Co. that it has not acquired a single steamboat line at 
any time since.it became unlawful. Since the act of Congress which 
prohibits railroads from buying out steamboat lines ? 

















































N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 161 

Mr. Buckland. No, we have not. 

Mr. Hardwick. Is that the first legislation you know of ? 

Mr. Buckland. That is the first, unless the Sherman law does in 
general terms. 

Mr. Hardwick. To put it back, the Sherman law was passed in 
1890. Have you acquired any new steamship lines since that? 

Mr. Buckland. Yes, many of them. We have acquired—I will 
correct that—we have the Joy Line which then ran from New 
York to Providence and Boston. We have acquired the Maine 
Steamship Co. which ran from New York to Portland. We acquired 
a half interest in the Merchants & Miners 7 Transportation Co., run¬ 
ning from Boston and Providence to Newport News, Norfolk, and 
Baltimore. All of those we control, except the Merchants & Miners’ 
Transportation Co., which, as I testified before the Senate Committee 
on Interoceanic Canals, was covered by a trust agreement, wherein 
the New Haven road had a right to nominate half the directors, the 
other stockholders had the right to nominate the other half, and the 
odd director was determined upon by the Safe Deposit and Trust Co. 
of Baltimore, so that we have not either a practical, a physical, or a 
theoretical control of the Merchants & Miners’ Transportation Co. 
To-day we do not own any line or exercise any control over any line 
of steamships running east of New Bedford, Mass. 

Mr. Hardwick. You do not have anything down to New York? 

Mr. Buckland. Nothing east. 

Mr. Hardwick. You do not run any more to Boston now, then ? 

Mr. Buckland. No. The steamers running to Boston, those run¬ 
ning to Portland, were sold to the Eastern Steamship Corporation. 
There have been a considerable number of innuendos made here in 
regard to our relations with the Eastern Steamship Corporation. I 
have stated this before the Panama Canal Committee, before the 
Interstate Commerce Commission, and I now state it here: The 
Eastern Steamship Corporation owes the New York, New Haven & 
Hartford Railroad for some three or four steamers which the New 
Haven road sold to it, and the New Haven road has taken bonds and 
some stock—not a controlling interest—in payment for those boats, 
because they had not anything else with which to pay for them. 
Those bonds and that stock are in the market at a price which 
approximates the appraised value of the steamers sold to the corpo¬ 
ration. We have not a man on the board of directors; we do not 
exercise any control, directly or indirectly—we could not if we wanted 
to—in the affairs of the Eastern Steamship Corporation or in any 
corporation running east of New Bedford. 

Mr. Lenroot. Are the stockholders common stockholders ? 

Mr. Buckland. No; my impression is that they are not at all. 
There is no common interest at all. Mr. Mellen’s statement before 
the Panama Canal Committee, on page 737, I quote from: 

We have a further investment which comes about in this way: We formerly owned 
the Maine Steamship Co., plying between New York and Boston. We sold this late 
last year to the Eastern Steamship Co., and the Eastern Steamship Co. delivered us in 
payment certain stock and bonds, which we are holding, intending to sell and liquidate 
that interest. It is purely a question of getting the price at which we value the 
securities, and they are for sale at any moment. 

The attitude of New England toward our ownership of the steam¬ 
ship lines was nowhere better represented than at the time the 

72177—13-11 


162 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Panama Canal bill came up. I think I am stating the truth when I 
say there was not a dissenting voice in regard to our retaining our 
ownership in these steamship lines. I think I am correct in saying 
that not even the Boston Chamber of Commerce opposed that propo¬ 
sition. The legislature of the State of Rhode Island passed a joint 
resolution instructing its Senators and Representatives to request 
that that clause in the bill which would embarrass us in the ownership 
and operation of those lines be omitted. Similar resolutions were 
adopted by the Chamber of Commerce of New Haven and, I think, of 
Bridgeport. At any rate, a number of the New England shippers 
think they are better served by the rail-and-water delivery into the 
lower part of New York than by taking chances in getting their ship¬ 
ments through the congested terminals which lead into New York 
City. 

Now, in reference to our ownership of the trolley lines, the New 
York, New Haven & Hartford Railroad Co. has, for some 20 years to 
my knowledge, owned some of the trolley lines in Connecticut. It 
was our observation that these trolley lines could under a common 
ownership give a better service in connection with the steam lines 
than they could under a divided ownership. They were not essen¬ 
tially competitive, they never have been essentially competitive, and 
the combination of ownership of steam and trolley lines I think has 
resulted—and I say this believing the people who live along our 
lines will bear me out in it—has resulted in a greater traffic being 
more conveniently handled by both steam and trolley lines. 

Mr. Garrett. Do the trolley lines carry both freight and passen¬ 
gers ? 

Mr. Buckland. Only in places. A great many of our cities have 
fairly narrow streets and there is a great deal of opposition toward 
the standard size cars of the railroad company running through 
those streets. There is an express business carried on by the trolley 
companies and at a very considerably lower rate than that carried by 
the Adams Express Co. on our steam lines. Then, too, the groove 
rail makes it impossible, inasmuch as the groove is generally narrower 
than the tread of the narrowest buggy that is driven on the street 
and too narrow to take the flange of a standard car, and that makes it 
impossible to handle the standard cars that way. But in some cases 
there are certain streets upon which they permit a T rail to be 
laid, in order that the standard cars may be taken from our house by 
an electric locomotive and carried to their destination at a cost of 
50 cents. This may be at variance with your ideas as to what is proper 
transportation; but when I tell you that in southern New England 
as much money is spent in getting goods from cars at the houses to 
the factories and back again as is paid to the railroads for carrying 
them, you can readily see that anything which will cut out the 
cartage charge and deliver the goods to the manufacturers in this 
way is in the interest of efficiency and economy, and ought to be 
encouraged. That is the gospel which I have preached among 
my friends ever since I have been authorized to represent the New 
York, New Haven & Hartford Railroad Co. 

Before leaving this subject of trolleys- 

Mr. Garrett. Then, as I understand, your contention is that in 
the acquiring of these trolley lines you have really supplemented 
your service ? 



N. Y. f N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 163 


Mr. Buckland. Yes, sir. 

Mr. Garrett. And not destroyed competition ? 

Mr. Buckland. No, sir. 

Mr. Lenroot. Not destroyed competition? 

Mr. Garrett. That is your contention ? 

Mr. Buckland. Absolutely; I say that advisedly. 

Mr. Garrett. You said a while ago they are not essentiaUy com¬ 
petitive. What do you mean by that ? 

Mr. Buckland. Perhaps I can not state it any better than by 
referring to these gentlemen who live in Pawtucket and Woonsocket. 
They will bear me out in the statement that since our acquisition of 
the line running from Providence and Woonsocket we have not in 
any way used one line for the purpose of promoting the other. If 
a man wants to go by trolley he goes that way, and if he wants to go 
by the steam road he goes that way. Is that not so ? 

Mr. Brown. The Providence & Woonsocket line was a competing 
line, and since the New Haven road has acquired it we have not 
suffered by reason of crippling the traffic at all, and the rates have 
remained the same as when the two lines were competing lines. On 
the trolley a man can go from Pawtucket to Providence for 20 cents 
and get a transfer- 

Mr. Buckland. From Woonsocket. 

Mr. Brown. Yes; from Woonsocket. To go by the railroad we 
have to pay the regular fare of 35 cents. The rates were just the 
same before the acquisition of the trolley line by the New Haven 
road. But they were competing lines. 

The Chairman. All the trolley lines are parallel with the steam 
lines ? 

Mr. Buckland. Yes, sir; practically parallel. 

The Chairman. Parallel and competing. Of course, you would 
have considered them competitors before you acquired them. 

Mr. Buckland. I do not think so, Mr. Chairman. I do not know 
whether I can convey to your mind what is in my mind. If a man 
wants to go by trolley, he goes by trolley, or he may go by steam, 
and there is no difference in that. 

The Chairman. Down in my State of Texas we are now building 
hundreds of miles of these trolley roads, and in every instance they 
are parallel with the steam roads, and in order to compete with them 
the steam roads have reduced the passenger and freight charges. 
After a while if these steam roads were to undertake to absorb the 
trolley lines they would be absorbing competing lines. Did the same 
condition obtain in New England before you acquired these trolley 
lines ? 

Mr. Buckland. Only to the degree that the country through 
which the lines operate is much more continuously settled, and there 
are fewer of the intersuburban lines to which you refer, so that there 
is no real competition in that service. A line which is running along 
the highway and stops anywhere to take on passengers is not a 
potential competitor with a through fast service. 

The Chairman. Those lines I speak of are competitors with the 
railroads, and the railroads are putting on motor cars and giving more 
frequent service. 

Mr. Buckland. I think you mean what would be comparable to 
the interurban service of the Middle West. 



164 N. Y., N. Id. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

The Chairman. That is what I am thinking of. What did you 
pay for these roads ? 

Mr. Buckland. That would take a long time to answer. I would 
have to go into each case. 

The Chairman. You have no idea of the cost in comparison with 
the real value; the cost of your road in comparison to the market 
value ? 

Mr. Buckland. I would rather not make any definite statement 
upon that because I might not be stating what is exactly true. My 
recollection of that is that with the exception of the Rhode Island 
properties that all of the lines acquired were acquired upon the basis 
of an earning value, not the market price of the stock. 

Mr. Garrett. Pardon me. Why did the New Haven road desire 
to acquire these trolley lines ? 

Mr. Buckland. Because they were supplementary to its regular 
business of transportation. 

Mr. Murray. May I ask a few questions of the gentleman from the 
railroad ? 

The Chairman. If Mr. Buckland does not object. 

Mr. Buckland. I would rather go on with my statement. 

Mr. Murray. It occurs to me it is pertinent here. 

Mr. Buckland. Very well. 

Mr. Murray. Were the trolley company holdings of the New York, 
New Haven & Hartford Railroad Co. as of date of June 30, 1910, 
$71,149,214? 

Mr. Buckland. Ido not know. 

Mr. Murray. Do you know in any general way what those holdings 
were ? 

Mr. Buckland. What do you men, the capitalization ? 

Mr. Murray. Yes. 

Mr. Buckland. I do not know. 

Mr. Murray. Can you give us any information on that line ? 

Mr. Buckland. I have not the annual report here. 

Mr. Murray. You have the Massachusetts validation report. 

Mr. Buckland. That was compiled as of two years prior to that 
date. 

Mr. Murray. Suppose you refer to that and see what it was then. 
There were not many trolley holdings taken over between 1908 and 
1910. 

Mr. Buckland. Suppose you take that and find it. 

Mr. Murray. Perhaps you can find it yourself. Perhaps we can 
get it. 

Mr. Hardwick. Suppose you tell him where you got those figures. 

Mr. Murray. I got them from a statement prepared by Mr. 
Joseph Edom, who is the secretary of the Public Franchise League. 
That league, Mr. Chairman and gentlemen, is an organization that was 
formed in the city of Boston and surrounding cities for the purpose 
of conducting investigations into matters relative to public service 
corporations for the purpose of presenting that information to the 
public bodies interested and for those who might have occasion to 
pass upon these questions. 

Mr. Hardwick. Is that their estimate ? 

Mr. Murray. No, these are the figures of the Massachusetts Vali¬ 
dation Commission’s report. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 165 

Those figures which I have show that the trolley company holdings 
of the New York, New Haven & Hartford roads as of date of June 30, 
1910, were $71,149,214. 

Mr. Buckland. Just what are you referring to, stock, or stock and 
bonds? 

Mr. Murray. Stocks, bonds, stock premiums, notes, and such 
elements of accounting. 

Mr. Buckland. Does that take into consideration the fact that 
some of them are leased lines, and refer to the capitalization of those 
leased lines ? 

Mr. Murray. I think it does. 

Mr. Buckland. I do not know. I do not think we can go into that 
detail, but I am willing to make up a statement in answer to that. 

Mr. Murray. Tell us something about the income of your railroad 
from the trolley lines of New England. 

Mr. Buckland. I can not. 

Mr. Murray. It is a fair statement that the income of the New 
York, New Haven & Hartford Railroad Co. from these lines is 
$1,839,996, or a little less than 2.6 per cent? 

Mr. Buckland. I do not think that is a fair statement. 

Mr. Murray. Can you tell me in what respect it is an unfair state¬ 
ment ? 

Mr. Buckland. I think it is too small. 

Mr. Murray. Then can you tell me what the figures should be? 

Mr. Buckland. I told you I did not know what the approximate 
figure is. 

Mr. Murray. I told you what figures I had, and you said they 
were too small. 

Mr. Buckland. That is my opinion. 

Mr. Murray. Can you tell us anything about the New York & 
Stamford trolley companies ? 

Mr. Buckland. What do you want to know about them? 

Mr. Murray. About the capitalization, the present capitalization 
as compared with the value previous to the taking over by the New 
York, New Haven & Hartford Railroad Co. 

Mr. Buckland. No; but there was a great deal of building done 
by the New York & Stamford Railway Co., and the consolidation of 
the original New York & Stamford Railroad Co. with a large number 
of other lines, which I think will account for the difference. 

Mr. Murray. You spoke about the New England Navigation Co. 

Mr. Buckland. No, I did not. 

Mr. Murray. Well, is the capitalization of that company about 
fifty-six or fifty-seven million dollars ? 

Mr. Buckland. I think a little less than that; I think it is about 
fifty-three million. 

Mr. Murray. Can you tell us anything about the income from that 
investment during the last year ? 

Mr. Buckland. No. 

Mr. Murray. Can you tell us whether it was approximately two 
and a quarter million dollars ? 

Mr. Buckland. No, I can not. 

Mr. Murray. Or what the present year’s income will be ? 

Mr. Buckland. I can not. 

Mr. Murray. Whether it is not a little less than 4 per cent ? 


166 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT, 


Mr. Buokland. I can not. 

Mr. Murray. Can you tell us anything about the present capitali¬ 
zation of the New York, New Haven & Hartford Railroad Co., what 
the total capitalization is at the present time ? 

Mr. Buckland. My recollection is that it approximates, capital 
stock issued and outstanding, about $121,000,000. 

Mr. Murray. I beg your pardon ? 

Mr. Buckland. My recollection is that it approximates, the 
capital stock issued and outstanding, about $121,000,000. 

Mr. Murray. That is the extent of the capitalization ? 

Mr. Buckland. Stock issued and outstanding. 

Mr. Murray. Can you tell us what it was in 1902, before the 
alleged enterprise of the New Haven in taking over other companies ? 

Mr. Buckland. It was very much more than that, and for reasons 
which I shall be very glad to indicate. 

Mr. Murray. And the statement of Mr. Edom that the capitaliza¬ 
tion had increased from $87,000,000 up to $450,000,000 in 1912 is not 
correct ? 

Mr. Buckland. No; not if he refers to the stock. 

Mr. Murray. Have you told the committee the extent of the 
present holdings of the New York, New Haven & Hartford Railroad 
Co. in the New England Navigation Co., and in the various street- 
railway companies ? 

Mr. Buckland. Ask me just what you want to know, and I will be 
glad to answer your question. 

Mr. Murray. Have you told anything about the taking over of the 
New England Navigation Co. ? 

Mr. Buckland. We always owned it. 

Mr. Murray. You always owned it? 

Mr. Buckland. Yes. 

The Chairman. Mr. Buckland has gone into those things. 

Mr. Murray. Did you always own the Rhode Island stock ? 

Mr. Buckland. No. 

Mr. Murray. When did you take that over ? 

Mr. Buckland. In 1906, December 19. 

Mr. Murray. Did you organize that ? 

Mr. Buckland. No. 

Mr. Murray. Do you know what its present capitalization is ? 

Mr. Buckland. You probably do not know a good many things 
in regard to this matter. 

The Chairman. Mr. Buckland has gone into some of those things 
in your absence, and I think just at present he would prefer to pursue 
the discussion along some other lines. 

Mr. Buckland. Most of the questions which you have been asking 
me are questions which should be properly addressed to an accounting 
officer, and all of those questions are now being investigated and 
answered before a committee of experts of the Interstate Commerce 
Commission who are examining our books at New Haven. 

Mr. Murray. Of course, we have not benefit of having an account¬ 
ant here of whom to ask those questions. You are the only man in 
sight we can ask them of. 

Mr. Buckland. The Federal Government will have access to the 
answers of all of those questions when this committee of experts of 
the Interstate Commerce Commission, examiners who are trained in 
that sort of thing, make their report. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 167 

Mr. Murray. Mr. Chairman, the only purpose of my asking these 
questions is to give the committee some definite idea of the kind of 
information that I for one—and I believe those who are interested in 
this investigation—desire to have answered, if we have the benefit 
of a special committee to do so. 

Mr. Buckland. Mr. Murray, if you had been here when I started 
you perhaps would not have asked me these questions, because I here 
stated that questions of that kind were being answered in the investi¬ 
gation that was going on by the Interstate Commerce Commission 
now. 

Mr. Murray. I think it is only fair to say that I came here from the 
House of Representatives where I had been to answer to my name on 
a roll call. 

The Chairman. Mr. Buckland went into a great many of those 
things, Mr. Murray, and I do not believe right at this time it would 
help much to interpolate the questions here, but later on it will be all 
right. 

Mr. Murray. Yes, when you give us the special committee. 

Mr. Garrett. There is one other question I should like to ask just 
now. Just before Mr. Murray began questioning I asked you why 
your companies desired to acquire these trolley fines, and you replied 
because they were supplemental or complementary of your com¬ 
panies’ business. In just what way are they complementary? 

Mr. Buckland. Iii the way in which I have already stated, by the 
utilization of the joint facilities of the steam .and the trolley roads in 
reference to the handling of freight, and in being able to render 
jointly services which can not be rendered so well separately. 

Mr. Garrett. That is true in the cities; that is to say, assuming 
that is true in the cities. 

Mr. Buckland. We have not very much—only a negligible 
quantity of interurban roads in the sense in which you gentlemen 
are familiar with them. When I say to you that practically all of our 
trolley lines run in the highway, in the public highway, whether they 
run between villages or not you can readily realize that they are not 
in the class of the interurban roads which you gentlemen doubtless 
have in mind whose cars run at the highest speed between distant 
places. 

Mr. Garrett. The great bulk of the mileage of trolley lines which 
you own is in cities or towns, then, is it? 

Mr. Buckland. In cities, yes. That is a true statement. And a 
comparatively small amount of it runs between towns, and even a 
smaller percentage of that amount runs on any private right of way. 

Mr. Hardwick. Now let me see if this is not what you are driving 
at. I think I understand it. You say you have an electric fine 
between towns—we will illustrate—20 miles apart. A man who was 
going to travel the whole 20 miles, travel from one town to the other, 
would take a steam road for that travel, would he not ? 

Mr. Buckland. That is right. 

Mr. Hardwick. But if he was going to stop along the line, on local 
business, he would take the trolley ? 

Mr. Buckland. Yes. I have heard of men traveling from Provi¬ 
dence to Boston by trolley, but I do not think they want to try it 
more than once. I have heard of people traveling from Hartford to 
New Haven by trolley, but they do not want to do it more than once. 
You know they stop at every white post on the line. 


168 N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Hardwick. I thought I knew, because I had been through an 
experience like that in the last few months. 

Mr. Buckland. Then, gentlemen, I do not know that I am going 
to say any more now except perhaps this: I want you to bear this in 
mind, if you will. In the State of New York, in the State of Con¬ 
necticut, in the State of Rhode Island, and I suppose after this 
session of the legislature in the State of Massachusetts, there are or 
will have been established public utilities commissions, all of which 
will have even greater powers in connection with service and rates 
on intrastate transportation than the Interstate Commerce Commis¬ 
sion has over interstate transportation. For instance, in the State of 
Connecticut and in the State of Rhode Island the public utilities 
commissions can not only, in the last analysis, upon complaint, but 
even upon their own initiative fix rates of freight which are fair, and 
not only that, but thev can do more than the Interstate Commerce 
Commission can do, tfiey can determine service. Therefore, when 
gentlemen like Mr. Gamble of the Lonsdale Co. complain of rates on 
coal—and parenthetically I may say I have never seen any money in 
carrying coal at less than 50 cents a ton, because it is a distance of 
10 miles, it involves switching, it involves three terminals, and 
involves hauling back free of charge. If Mr. Gamble does not like 
the rate from Wilkes-Barre pier to Lonsdale he has an ample remedy 
in his own jurisdiction, and so it is with reference to all of the public 
utilities commissions in those various States. In other words, a 
resort to home rule will take care of most of the alleged evils of which 
they complain. 

Mr. Lenroot. Right there, Mr. Buckland, that power has been 
challenged. It is now pending in the Supreme Court in what is known 
as the Minnesota case—the extent of tne power of the commission. 

Mr. Buckland. Only in so far as the local rates necessarily reduce 
an interstate rate. 

Mr. Lenroot. Exactly, but that is very far reaching. 

Mr. Buckland. That would not apply to the Lonsdale Co. 

Mr. Lenroot. Not the particular case, no. 

Mr. Buckland. I hope my Providence friends have not all gone. 
I only wanted to say this in reference to the water front at Providence, 
said in order that the statements may not go unchallenged. I per¬ 
sonally bought most of the harbor facilities, the dockage which the 
New York, New Haven & Hartford Railroad owns to-day. When I 
went to Providence in 1898 a certain stretch of harbor front between 
what is known as Fox Point and India Point, in the vicinity of half a 
mile or a quarter of a mile in length, was intersected by various other 
wharf properties, and in order that we might develop our yard at that 
place I bought it. I paid anywhere from, my recollection is, 40 
cents to $1 a square foot. I have been offered, and I can to-day 
take half the money and buy as much water front in Providence, and 
equally well adapted for the purposes and contiguous to a railroad. 
I refer to that because I am not talking on hearsay now—two offers 
which I have repeatedly declined to entertain of property on the east 
side of Allen’s Avenue where our tracks are now laid, and where it 
was agreed that the Southern New England tracks might be laid. 
That has been offered to me for 6 cents a square foot, and as to 
which it would be entirely practical to wharf out and make a water 
frontage equally adaptable to that which the New Haven road owns. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 169 

I am saying this, gentlemen, only to show you that we do not monopo¬ 
lize the water front of Providence. We do not monopolize the water 
front of Narragansett Bay, and it would be perfectly absurd for any 
man in his senses to attempt such monopoly. And the only reasons 
that I had in buying the water front in Providence was for the pur¬ 
pose of making a continuous development of our own freight yards 
and wharves. 

Mr. Lenroot. In that connection, have there ever been any prose¬ 
cutions for failing to furnish trackage facilities to wharves on your 
road ? 

Mr. Buckland. I know of none. On that question of the Fabre 
Line which has been brought up here—I am sorry Capt. Briggs is not 
here because I wanted him to hear this. Capt. Briggs and Mayor 
Fletcher came to me and said that the Fabre Line was coming in from 
Azores Island and Genoa, and wanted some place to dock. I said, 
“You can have the Lonsdale Dock which is the only place we have 
here.’' They £aid, “The water is not deep enough there.” I said, 
“You had better dredge it if you want to get up there, because you 
can have the dock. You can try it when you get up there; try it for 
a while. Then we will make our arrangements in relation to the cost 
of it.” 

My recollection is that I paid for the Lonsdale dock something in 
the vicinity of $60,000. The Fabre Line came in there. The dredg¬ 
ing was done, and they landed passengers, and the only question 
which has ever arisen has been as to whether or not after this experi¬ 
ment has been successful we were not entitled to a fair rental on that 
dock. Now, I have done that. And, I want to say this without fear 
of contradiction, so far as the New Haven road has declined to 
receive freight from the Fabre Line or from any other line in Provi¬ 
dence—I speak on the authority of our traffic manager, that such a 
report is absolutely without foundation—any company which would 
be guilty of turning away freight that was landed at its dock and 
force that line to go down to New York and ship that freight upon its 
rails at New York for the purpose of hauling it back there, must have a 
traffic manager who is absolutely drunk or crazy, and our men are not 
of that kind. They are not insane. They are not doing things which 
are absolutely absurd and unreasonable on the face of it. 

Gentlemen, in conclusion, I started out by saying that we were 
a New England owned railroad. We employ more men in New 
England than any other industry, numbering about 65,000. There 
are over half a million people on our pay roll. X mean, dependent 
upon our pay roll. We have a larger stake in New England than 
any other industry in New England, and anything which we do to 
throttle or choke the prosperity of New England throttles and chokes 
ourselves. If ever there was "a case where the community and the 
transportation companies should cooperate, should get together upon 
a basis of each fairly dividing the prosperity which should come to 
it, if there were ever a case where a supremacy of industrial develop¬ 
ment was absolutely cooperative and reciprocal, it is in the company 
which I represent. 

Now I come back to my original proposition. Anything which 
you desire to investigate in reference to our relations with the South¬ 
ern New England or the Grand Trunk is entirely open to you and will 
receive our hearty cooperation. 


170 N. Y v N. H. <fc HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


Mr. Garrett. May I ask you this, is there any connection between 
the agreement which you read early in your remarks and whatever 
may have gone before that agreement, and the cessation of work on 
this line of railroad that runs through Providence, that you know of ? 

Mr. Buckland. Not to my knowledge. I never knew or had any 
idea of the cessation of the work until I saw Mr. Chamberlain’s 
dispatch in the Providence paper, I think it was. 

Mr. Garrett. And you have received no information in regard to 
that matter since ? 

Mr. Buckland. None whatever. 

Mr. Hardwick. What reason did he give in this dispatch for the 
cessation of work ? 

Mr. Buckland. Financial considerations, I think it was. 

A Gentleman in the Audience. The cold weather as v r ell as 
financial considerations. 

Mr. Hardwick. What is the scope of this Federal investigation 
that is going on before the grand jury in the southern district of 
New York ? 

Mr. Buckland. I do not know. I have not been summoned. 

Mr. Hardwick. Is it on account of this transaction, this Grand 
Trunk matter ? 

Mr. Buckland. I think absolutely on that account. 

Mr. Hardwick. Suppose we order an investigation here on that 
matter. You say you will cooperate with us. Would we not find 
ourselves in this position, that the people that we want from your 
organization,'your company, would come down here and say, “I am 
about to be indicted,” or, “I am indicted, and I ask for the immunity 
under the constitution not to give evidence against myself.” And 
could we get anywhere with that so far as the same is covered or 
duplicated by the United States court’s investigation now pending ? 

Mr. Buckland. That is largely a question of law. I assume that 
if any representatives of the New Haven road should desire to take 
advantage of the statute upon that point and refuse- 

Mr. Hardwick. The reason I asked you the question is this, you 
were so nice about saying that you were willing to cooperate with 
us, and I was afraid that after we got the investigation started the 
cooperation might take that form. The persons would come down, 
the very persons we have got to call on, who know about this thing, 
and we would put them on the stand, the committee would begin to 
interrogate them about this thing—you see I have been up against 
this thing before; that is why I asked you the question—and they 
would say, “I am about to be indicted,” or “I have been indicted 
in the Federal courts, and under the constitution of the United States, 
I do not want to incriminate myself.” Would not that be liable to 
occur in this instance ? 

Mr. Buckland. I am rather at a loss to answer that question, 
because I do not know just what they are doing in that inquiry. 

Mr. Hardwick. I do not either, but I thought perhaps you did. 

Mr. Buckland. Mr. Mellen has stated in his letter to the district 
attorney of New York that he was the only one that had conducted 
the negotiations in regard to this Grand Trunk agreement, and that 
he was the only one that knew everything that had taken place, and 
I believe that statement of Mr. Mellen’s to be the exact truth. Per¬ 
sonally, I do not know anything about it; but if 1 am summoned 



N. Y.y N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 171 

here I will waive all immunity and will come and tell you that I do 
not know anything about it. 

Mr. Hardwick. It would seem, then, that the only person who 
would do this committee any good would be Mr. Mellen. 

Mr. Buckland. He has already waived the question of immunity. 

Mr. Hardwick. I thought there was some question as to whether 
they would allow him to testify. 

Mr. Buckland. I think Mr. Wise raised the question as to whether 
he could waive it. 

Mr. Hardwick. I thought he came before the grand jury finally. 

Mr. Buckland. I do not know whether he has been summoned 
or not, or if Mr. Wise will allow him to come, but he has waived the 
question of immunity. 

Mr. Hardwick. He is willing so far as he can, then ? 

Mr. Buckland. He is willing so far as he can. If he can waive 
the immunity, he will waive it, and therefore I do not believe- 

Mr. Hardwick. I was wondering, though, whether that would not 
be in the way of this particular investigation. That same trouble 
Mr. Wise is having we might have down here in Washington. 

Mr. Buckland. Of course, gentlemen, you are asking me now a 
question of technical law. 

Mr. Hardwick. No; I only meant to ask you- 

Mr. Buckland. I am perfectly willing to answer it, but it is a ques¬ 
tion of law, nevertheless, and my thought is that if you should summon 
a man to come before you and he did not want to come, and you 
made him come and made him testify, undoubtedly he would be 
immune, but I have seen no evidence of that on the part of the 
representatives of the New Haven road, beginning with the president 
and going all the way down. 

These things come to my mind as I go along. When the Southern 
New England Railway Co. first made application to come to Rhode 
Island I was in charge of the law department of the railroad at that 
time and, among other things, delegated with the responsibility of 
conducting these legislative affairs. When the petition for the 
charter which Mr. Holmes testified to came in I challenged the good 
faith of the petition, thinking that there were not people of responsi¬ 
bility back of it, and that I questioned whether the Grand Trunk 
assumed any responsibility. A hearing was had, at which time I 
made that challenge in a room as large as this, attended by most of 
the legislators, and in the midst of that hearing a cablegram was 
read signed by Mr. Hays, stating, as somebody has testified here, 
that the directois of the Grand Trunk had assumed the full responsi¬ 
bility. I immediately withdrew the charge and then made this 
statement: That if the Grand Trunk is coming into Rhode Island as our 
competitor it is only fair to us that it be required to come in on equal 
terms, the terms which you have required of us in all new work, with 
no grade crossings, no crossing of trolley tracks at grades, no crossing 
of steam roads at grades, and I am entitled to ask that that lestric- 
tion be placed upon the Grand Trunk. It may have the use of our 
passenger terminals upon a pro rate of the business done, but it 
shall have my opposition to taking any part of our freight terminals, 
because we have not any more than we need ourselves. I then said 
that if the Southern New England desires to come on those terms 
it will have no opposition from me or from the New York, New 




172 N. Y. f N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Haven & Hartford Railroad Co. in Rhode Island. And, gentlemen, 
I have kept my word from that day to this. 

The Grand Trunk tried to take part of our tracks from Harbor 
Junction, as the mayor testified to, and I opposed it, as I said I 
would, and I did. The Grand Trunk tried to lay out its tracks across 
a freight yard in Woonsocket. I opposed it, as I said I would. But 
with the exception of those two tilings, the Grand Trunk has had 
no opposition from the New York, New Haven & Hartford Railroad 
Co. in the State of Rhode Island. 

I am sorry that the Providence gentlemen have gone, but it they 
were here I think they would substantiate that statement. 

Mr. Hardwick. Is that policy true in other New England States ? 

Mr. Buckland. I was not responsible for that. 

Mr. Hardwick. I know, but I thought you might know. 

Mr. Buckland. I do not. Let me tell you this: Once as a result 
of the endeavor of my opposition to Grand Trunk using our tracks 
I was required to enter into an agreement on behalf of mv company 
that would show them another way that would not cost them any 
more, and that bond is on file with the Secretary of State to-day. 

Just by way of passing I wish to say that in New England there 
are the following lines as to which no control is had by the New York, 
New Haven & Hartford: The Central Vermont and its leased lines; 
the New York, New London & Northern, which is owned by the 
Grand Trunk; the Bangor & Aroostook, operating from Bangor into 
northern Maine; the Grand Trunk which runs into Portland; the 
Canadian Pacific which also runs, I think, to Portland, and the 
Boston & Albany, which is owned by the New York Central. 

Mr. Murray. May I ask you a question ? 

Mr. Buckland. Yes. 

Mr. Murray. Is it true that there is a traffic agreement between 
the Boston & Albany and the New Haven road to divide profits and 
losses ? 

Mr. Buckland. Yes, sir. 

Mr. Murray. Will you tell the committee about that traffic 
agreement ? 

Mr. Buckland. It is an operating agreement whereby the New 
York, New Haven & Hartford is given certain trackage rights over 
the Boston & Albany, and the net result is a division of profits of 
losses between the companies. 

Mr. Lenroot. So there is no competition then ? 

Mr. Buckland. Oh, yes, because they operate in different territo¬ 
ries. 

Mr. Lenroot. I mean so far as they might compete with each 
other. 

Mr. Buckland. They do not operate in the same territory. 

Mr. Murray. Is it not true that in Fitchburg and the surrounding 
territory they do operate in the same territory ? 

Mr. Buckland. I do not think so. 

Mr. Murray. Has it been brought to the attention of the company, 
if you know, that complaint against that traffic agreement may be 
made as a violation of the Sherman antitrust act ? 

Mr. Buckland. No, and moreover, Mr. Murray, my recollection 
is that that traffic agreement was approved by the railroad board 
of Massachusetts. 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 173 

Mr. Murray. That would not be conclusive that it was not a vio¬ 
lation of the Sherman antitrust law. 

Mr. Buckland. Undoubtedly. I wanted, though, to remove any 
imputations in your question that it was secret or unknown. 

Mr. Murray. Of course, I know about that railroad end of the 
matter, but you do not mean to say to the committee that there is 
not any real op potential competition between any part of the terri¬ 
tory served by the Boston & Albany and any part of the territory 
served by the New Haven ? 

Mr. Buckland. Mr. Murray, I do not believe there is any part of 
the United States where there is not any real or potential competition 
with practically any other part of the United States. 

Mr. Murray. So you say in answer to my question that there is 
such competition ? 

Mr. Buckland. Yes; and there is everywhere. 

Mr. Murray. I am only inquiring about that particular place. 

Mr. Buckland. I appreciate that if you carry that to its proper 
and legitimate conclusion you will have potential competition in 
practically every part of the United States. There is competition 
between the various lines of our own road in reference to industries. 

Mr. Murray. Yes. 

Mr. Buckland. Take two companies which are producing the 
same thing—cotton goods or woolen goods, and having a common 
center—those industries compete with each other to the extent that 
you have got to put them into the common point of consumption 
upon the same basis. 

Mr. Murray. What was the puprose of making traffic agreements 
of that sort ? 

Mr. Buckland. Because we were in a position where we could 
throw a good deal of traffic to the Boston & Albany that they could 
not get otherwise. 

Mr. Murray. It was a sort of beneficent arrangement on your 
part? 

Mr. Buckland. A good business arrangement. 

Mr. Murray. Where was the good business arrangement from your 
point of view? Was it to give them something they could not get 
otherwise ? You do not mention that part of it. That was a feature 
of the agreement, was it not ? 

Mr. Buckland. I do not carry the wording of the agreement in my 
mind. 

Mr. Murray. But you were to get something ? 

Mr. Buckland. My recollection of it is—you of course know it— 
that for many years the Boston & Albany Railroad Co. from Spring- 
field into Boston has been a part of a through line between Boston 
and New York. 

Mr. Murray. Yes. 

Mr. Buckland. And the trains of the New Haven road, almost 
from the beginning, have run solidly through from New York to 
Boston and from Boston to New York via the Springfield line. 

Mr. Murray. Yes. 

Mr. Buckland. The traffic agreement or operating agreement, or 
whatever you may call it, was only an amplification of what had been 
going on for a large number of years. 


174 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

Mr. Murray. I have been fortunate enough to find that table that 
gives the facts about the Rhode Island Co. May I ask you about 
that now ? 

Mr. Buckland. You may ask me, but I am afraid I shall not be 
able to answer. 

Mr. Lenroot. I should like to get this one thing straightened out. 
I gather from what you say that there is no competition either by 
reason of the traffic agreement or otherwise between the Boston & 
Albany and the New Haven ? 

Mr. Buckland. There is a possibility of competition. For instance, 
from Worcester to Springfield, if you come down here [indicating on 
the map], come down by way of Willimantic, and go up there [indi¬ 
cating]. 

Mr. Lenroot. Yes; but you will have traffic rights over that now? 

Mr. Buckland. Yes. 

Mr. Lenroot. And in the division of profits and losses of course 
there is no competition ? 

Mr. Buckland. It is not trackage rights. The locoftiotives of the 
Boston & Albany operate upon their own tracks. 

Mr. Lenroot. Yes. 

Mr. Buckland. They take our trains through. 

Mr. Lenroot. They take your trains through ? 

Mr. Buckland. Yes. 

Mr. Murray. At page 145 of the validation commission’s report 
I find the book value of the Rhode Island Co. appraised at 
$24,220,978.90, and I find in the next column the appraised value of 
that stock stated as $6,000,000. Can you tell something about that— 
the Rhode Island trolley companies ? 

Mr. Buckland. My recollection is—I do not carry these figures in 
my mind, and what I say is subject to correction—that the validation 
commission found that the Rhode Island Co. property was worth very 
much less than what we paid for it. I think the commission at the 
same time found that many others of our properties were worth a 
great deal more than what we paid for them. 

Mr. Murray. Do you know what those properties were ? 

Mr. Buckland. Yes; the Central New England Railroad Co. is one 
of them, and there are many others. The report shows it. I do not 
think it worth while to take up the time of this committee to go into 
that question. But as a result of the whole thing the validation com¬ 
mission, if I recollect correctly, found that our investments taken as 
a whole were worth more than what we paid for them. 

Mr. Murray. I find at page 105 the total book value, the grand 
total, $204,866,988.88, and in the next column the appraised value 
stated as $184,319,763.26. Are there any other figures in these 
reports that you know of that would show the statement that you 
make ? 

Mr. Buckland (looking at book). Yes; here is the Harlem River 
& Port Chester Railroad Co., which has a book value of $25,000,000 
and an appraised value of $41,000,000. 

Mr. Murray. That is a single item, of course. I mean in grand 
totals—in totals, anywhere. 

Mr. Buckland. I am not sufficiently familiar with the report on 
this to answer that question. 


N. Y. f N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 175 

Mr. Murray. You have named two. Can you name any others 
that show an appraised value greater than the book value ? 

Mr. Buckland. Yes. The most of them here. 

Mr. Murray. The most of them ? Does the Connecticut company 
show it ? 

Mr. Buckland. Here is the New Haven & Northampton Co., with 
a book value of about $1,000,000, and an appraised value of $6,500,000. 

Mr. Murray. That is three. 

Mr. Hardwick. Could not those figures be put in the record ? 

Mr. Murray. They can be put in the record, but that is where they 
have been going for the last six or seven years. They have been buried 
in the record, and I do not think we will get anywhere with them if 
we get them buried in the records. 

Mr. Hardwick. But we have not the time to do this now. 

Mr. Murray. Of course I do not mean to ask these questions for 
any purpose other than to achieve the results that the people of New 
England wish to have achieved. 

Mr. Hardwick. We will read them. 

Mr. Murray (continuing). That is why I suggest that I am in 
entire accord with your idea. This is not the place to extend the 
hearing. This is the sort of thing we can show, if we get a special 
committee, just as you could have shown by getting a special commit¬ 
tee in the Lawrence situation instead of prolonging it as you did do, 
unfortunately. I say “ unfortunately ” because that is the point of 
view that has been expressed to me by the chairman and other mem¬ 
bers of the committee. But I do think there should be some kind 
of a congressional investigation that will get at the facts. 

Mr. Hardwick. Then you can get all those details of course ? 

Mr. Murray. Certainly. That is what I want to see done. Cer¬ 
tainly the facts are there, and the people want to know about them, 
and they are entitled to know about them. 

Mr. Hardwick. You can put them all in the record. 

Mr. Murray. There may be a reasonable explanation of this. If 
there is, the New Haven can not stand in the way of having it made, 
but it does seem that a company like the Rhode Island company with 
a book value of $24,000,000, taken over in 1908, with an appraised 
value made by all kinds of accountants of only $6,000,000 shows a 
situation of three-quarters water. Then we want to know why that 
is so. 

The Chairman. That would come before that committee. 

Mr. Murray. If we have one. 

The Chairman. Certainly. 

Mr. Murray. If we are going to have the committee I do not want 
to^prolong this hearing. 

Mr. Buckland. These statements that Mr. Murray is apparently 
making for the record here have been made over and over again, 
accounting statements that can be answered in the time and place 
for it. 

Mr. Murray. I do not hear them now. 

Mr. Buckland. Because I am not an accounting man. 

Mr. Murray. You are here representing the railroad. It is not 
fair for Mr. Buckland to hide behind that statement. 

The Chairman. Mr. Buckland is not to be subjected to cross-exami¬ 
nation about this. He is making a statement. Now, if you want tQ 


176 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

make a statement in rejoinder, you will have the right to do it, and 
put these figures in the record. 

Mr. Murray. I certainly defer to any ruling that may be made by 
the chairman or by the committee through the chairman, but I do 
desire to give you the point of view that when a man comes here repre¬ 
senting a railroad transportation company it gives us the opportunity 
to g t information to which we are entitled, and in the most respectful 
way we are trying to get that information. Do not let us misunder¬ 
stand one another. I do not want to be put in a false position here. 

The Chairman. I think you have replied fully to that. Now, if 
you want to reply to anything he has said you can do it, or you can 
file your statements. I think we had better continue, because there 
are one or two other gentlemen we want to hear. We want to hear 
Mr. Walker on a point that has been raised. 

Mr. Buckland. My train of thought, to use a railroad expression, 
was flagged there. 

Mr. Murray. A train can only be flagged when it once gets 
started, and I have not seen any start of that train of thought. 

Mr. Buckland. A statement was made by Mr. White yesterday 
regarding an analysis by Mr. Brandeis of the New York, New Haven 
& Hartford Railroad Co. accounts made at the time the acquisition 
of the Boston & Maine was contemplated, for the purpose of showing 
that the New Haven road was not in a financial condition to vote. 
That was entirely discredited by another investigation, by the so- 
called Industrial Commission of Massachusetts, and was completely 
discredited in the report of the validation commission. 

Mr. MacLeod this morning stated that he felt that the only way in 
which the port of Boston could be developed, or rather the chief way 
in which it could be developed, was by having some other road come 
in there. I called the gentleman’s attention to the fact that practi¬ 
cally all the development of the port of Boston which has heretofore 
taken place has been done with the assistance of either the Boston & 
Maine or the New York, New Haven & Hartford. The last company 
which has been brought in, largely through the cooperation or the 
New York, New Haven & Hartford Co., has been the great trans- 
Atlantic company, the Hamburg-American Line. 

I think I have taken altogether too much of your time. 

I only wish to say in conclusion that we were investigated by Mr. 
French and Mr. Bonaparte in 1909; we were investigated by the 
Industrial Commission in 1907 and 1908; and we were investigated 
by the Validation Commission in 1910; and the Boston & Marne, 
and our control over it, has just been investigated by the New Hamp¬ 
shire commission. The Interstate Commerce Commission is now 
investigating us in New Haven and Boston, and the Committee on 
the Merchant Marine and Fisheries of the House of Representatives is 
also investigating our steamship lines. 

Mr. Hardwick. And the grand juiy . 

Mr. Buckland. And the grand jury in New York. Thank you. 

Mr. Hardwick. So you are used to it. You will not care if we 
investigate you a little more ? 

Mr. Buckland. Gentlemen, I have no objection to your investiga¬ 
tions if you will not duplicate the work. 

Mr. Murray. We will not. 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 177 

Mr. Buckland. If you will not duplicate the work; if you find 
out about some things that you do not know now and limit vour 
investigations to those things which have not already taken our time, 
taken our attention, taken the service of ojur men away from the 
company which they ought to operate, I shall have no objection and 
shall cooperate with you heartily. 

Mr. Lenroot. There is one other question I should like to ask. 
To what extent is there a substantial competition in transportation 
facilities in New England at the present time ? 

Mr. Buckland. There is competition in the steamboat lines run¬ 
ning on the Sound between New York and New Rochelle, New York 
and Greenwich. New York and Stamford, New York and Norwalk, 
New York and New Haven. New York and Norwich, New York and 
Providence, New York and Boston, New York and Block Island, 
Providence and Block Island, and Montauk and Block Island. There 
is competition by the Grand Trunk—-a line of steamers running from 
New York to New London and thence up through New England. There 
is competition in the coal business by a great fleet of steamers, both 
tramp and regular lines, bringing coal to the ports of New England. 
There is competition via the Metropolitan Steamship Co. between 
New York and Boston and New York and Portland. There is com¬ 
petition by the Merchants and Miners’ Transportation Co. from Boston 
and Providence to Philadelphia, Norfolk. Newport News, Baltimore, 
and Savannah. Those are all that occur to me right off the bat. I 
think I might think of some others. 

Mr. Lenroot. That is the extent of the substantial competition, 
generally speaking ? 

Mr. Buckland. The Bangor & Aroostook running from northern 
Maine—that is not shown on the map—transports its goods over a 
steamer line from Stockton Springs to New York. 

Mr. Hardwick. That would be the only railroad competition? 

Mr. Buckland. And there is competition, of course, by water 
between Boston and Canadian ports. 

Mr. O’Shaunessy. I was not present during all of your statement, 
Mr. Buckland. Do I understand that the agreement which has been 
offered here in evidence was rejected by the Grand Trunk people? 

Mr. Buckland. I only know what I have seen in the papers. 

Mr. O’Shaunessy. Do you know if any other agreement is being 
considered between the two railroad companies ? 

Mr. Buckland. No, sir; I do not. 

The Chairman. Is that all ? 

Mr. Buckland. That is all. 

The Chairman. Have you anyone else you wish to present on 
your side of the question ? 

Mr. Buckland. No. 

The Chairman. Mr. Walker, the committee will be glad to hear 
from you on the point you wanted to be heard upon this morning. 

Mr." Buckland. I should be glad to forward to the committee copies 
of these reports to which I have referred. 

The Chairman. I think it would be well to file them with the clerk, 
so that we can consult them whenever we need them. 

72177—13-12 


178 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

STATEMENT OF MR. ALBERT H. WALKER, NEW YORK CITY. 

Mr. Chairman and gentlemen of the committee, I appear before 
you at the request of the chairman. I do not represent any client 
who has any interest in the New York, New Haven & Hartford Rail¬ 
road Co., or in any other corporation which has been mentioned here 
to-day. I occupy the position of a jurist, and writer on questions in 
the interstate-commerce law and the Sherman law, to make such 
suggestions as have occurred to me relevant to the application of those 
laws to the facts which have been presented to the committee; and 
afterward to answer whatever questions may be put to me by the 
committee on any of these topics. 

I have heard all that has been said during this inquiry, and I 
understand that the question before the committee is whether it 
shall recommend the House to appoint a special committee to make 
an investigation into certain points of fact. 

The House has jurisdiction to investigate matters only where it 
has jurisdiction to take action in pursuance of whatever facts it may 
ascertain. That action may take the form of legislation, or it may 
take the form of impeachment of unfaithful executive officers. And 
without suggesting at this moment that there is any occasion to 
exercise this last jurisdiction, it is plain that whenever anything is 
brought to the attention of Congress which is worthy of consideration, 
and which lays the foundation for a suspicion that there might be 
some propriety in impeachment proceedings, Congress has jurisdic¬ 
tion to at least investigate the charges. 

In order to apply the facts which have been developed in this 
hearing to .the legal problems involved, it will be necessary for me 
to make a brief statement of some portion of the development of the 
jurisprudence which passes under the name of the Sherman law. The 
Sherman law was enacted by Congress in 1890, and I will read at this 
moment sections 1 and 2 of that act, which are very brief, and which 
are all that need to be read in order to explain the relation of that 
statute to the facts before the committee. 

Section 1 of the Sherman law reads as follows: 

Every contract, combination in the form of a trust or otherwise, or conspiracy, in 
restraint of trade or commerce among the several States or with foreign nations is 
hereby declared to be illegal. Every person who shall make any such contract, or 
engage in any such combination or conspiracy shall be deemed "guilty of a misde¬ 
meanor, and on conviction thereof shall be punished by a fine not exceeding five 
thousand dollars or by imprisonment not exceeding one year, or by both of said 
punishments in the disrcetion of the court. 

The improper thing which is prohibited by this section is therein 
defined as combination in restraint of trade. This section does not 
prohibit restraint of trade which may be perpetrated by one corpora¬ 
tion or by one man. 

Section 2 is as follows: 

Every person who shall monopolize, or attempt to monopolize, or combine or con¬ 
spire with any other person or persons to monopolize, any part of the trade or com¬ 
merce among the several states, or with foreign nations, shall be deemed guilty of a 
misdemeanor; and on conviction thereof shall be punished by a fine not exceeding 
five thousand dollars, or by imprisonment not exceeding one year, or by both of said 
punishments in the discretion of the court. ' 

Shortly after the beginning of the administration of President 
Roosevelt, he directed his Attorney General to Ifring an action against 


N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 179 

the Northern Securities Co., the Great Northern Railway Co., and 
the Northern Pacific Railway Co., for violation of the first section of 
the Sherman law. The theory upon which that action was based was 
this, namely: A new corporation, the Northern Securities Co., was 
organized in the State of New Jersey, and that corporation purchased 
all the stock of the Great Northern Railway Co., and all the stock of 
the Northern Pacific Railway Co., with the view of running the two 
railroads as one system. That suit reached the Supreme Court of the 
United States, and in 1904 that court decided, by a vote of five 
judges to four, that that was an illegal combination, because it 
violated section 1 of the Sherman law. Four justices dissented from 
that decision. The dissenters were Chief Justice Fuller, Justice White, 
who is now Chief Justice, Justice Peckham, and Justice Holmes. 
Those justices dissented from the opinion of the Court on their view 
that a violation of the Sherman law does not result from a mere 
combination of two theretofore competing corporations, and that 
such violation does not occur until some overt act is committed in 
pursuance of such a combination, and which overt act results in 
restraint of trade. And in the view of Justice White and the three 
other dissenting justices, such overt acts had not yet been committed 
m the Northern Securities case, and therefore the Sherman law had 
not been violated. 

But the opinion of the court was delivered by Associate Justice 
Harlan, and he took the ground that the acquirement of combined 
power to restrain trade violates the Sherman law, because it consti¬ 
tutes a combination which potentially will operate to restrain trade. 
Three judges of the Supreme Court agreed with Justice Harlan in all 
respects. Justice Brewer did not agree with the proposition that the 
mere acquirement of the power to violate the Sherman law con¬ 
stitutes a violation thereof, but he did agree that the Sherman law 
had been violated in that case. So that combination was dissolved 
by a vote of five justices against four. 

That is the law that was established in that litigation. Afterward 
the question arose as to whether the purchase by one corporation of 
the controlling stocks of a competing corporation constituted a viola¬ 
tion of the Sherman law. In support of the affirmative of that propo¬ 
sition the decision of Justice Harlan could be cited. In support of 
the negative the dissenting views of Justice White could be cited. 

That was the state of the law at the time that the United States 
Steel Corporation desired to acquire the ownership of the Tennessee 
Iron & Coal Co. When they acquired that desire they were afraid 
that the executive department of the Government might differ from 
their views. They held that the mere acquirement of the stock of 
the Tennessee Iron & Coal Co. would not violate the Sherman law, 
for they might use it to promote trade rather than to restrain it. 
In that view of the case they presented to President Roosevelt the 
question as to whether or not he had any objections, as the executive 
department of the Government, to the purchase of that stock. 
I know the view that President Roosevelt took of that matter as a 
result of personal correspondence between himself and myself upon 
that precise point, and the view he took of it was rather well founded 
upon the Northern Securities case. 

The view he took of it was that the acquirement of the stock of the 
Tennessee Iron & Coal Co. did not violate the Sherman law, although 


180 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

the ownership of that stock might afterward be used to violate that 
law: and therefore when he said to the gentleman who represented 
the United States Steel Corporation, that he saw no objection to their 
purchase of that stock, he was substantially saying to them: “So far 
as I know, you may use this stock after you have acquired it, to pro¬ 
mote trade; but if you do use it to restrain trade, then you will be 
violating the law.” It was in pursuance of that view of the Sherman 
law, which view was originally based upon the opinion of Justice 
White, in the Northern Securities case, that President Roosevelt, as 
*1 understand it— 

Mr. Hardwick. If you will pardon me just a moment, I will say 
that that very opinion which you refer to had been denounced in 
round terms by President Roosevelt all through this country. 

Mr. Walker. To which opinion are you referring? 

Mr. Hardwick. The original opinion in the Northern Securities 
case. 

Mr. Walker. I am unable to say that. I am pretty well acquainted 
with the history of the matter; but I am not able to agree with you 
upon that point. You know some facts, probably, that I do not 
know. 

Mr. Hardwick. I thought that was true. 

Mr. Walker. You could not prove it by me. [Laughter.] 

It was in pursuance of that view of the Sherman law, as I under¬ 
stand it, that President Roosevelt acquiesced in the purchase by the 
New York, New Haven & Hartford Railroad Co. of those competing 
steamboat lines. 

Mr. Hardwick. I do not want to have a joint political debate with 
the gentleman, but I am willing to if he wants to put it on that 
ground. I thought he was discussing a question of law. I think the 
President’s action in that matter was based on entirely different 
motives from that. 

Mr. Walker. I am not inquiring into his motives. 

Mr. Hardwick. I think you are. You are trying to make a 
defense of him, right here, about this matter. 

Mr. Walker. I am trying to explain to the committee what I know 
about the development of the Sherman law, but I am not agreeing 
with President Roosevelt. I do not agree with his views on the 
Sherman law, I will tell you that now. 

Mr. Hardwick. You do not? 

Mr. Walker. I do not. 

Mr. Hardwick. Where did you get the idea that that was the 
reason why he gave that Tennessee Coal & Iron Co. opinion? 

Mr. Walker. Because he wrote so to me personally, and I have 
the letter. 

Mr. Hardwick. That has never been published, has it ? 

Mr. Walker. Certainly not. 

Mr. Hardwick. When did he make that explanation of his conduct 
in that matter ? 

Mr. Walker. He wrote that letter to me about two years ago, 
since he came back from Africa. 

Mr. Hardwick. I am much obliged to you. Now I have what I 
want. 

Mr. Walker. Gentlemen, you will see the strict relevancy to my 
discussion of all I am saying. I am not trying to insert any remarks 


N. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 181 

in the interest of any particular gentleman. I am trying to explain 
to you the development of the Sherman law in executive and judicial 
proceedings. In 1908—and I must beg the committee to listen to 
this- 

Mr. Hardwick. I beg your pardon; but to correct the statement 
I made. I said that President Rosevelt had denounced certain 
decisions of the Supreme Court. The cases I had in mind—I want 
to say this in justice to myself as well as to you—were the trans- 
Missouri and the joint traffic cases, which preceded the Northern 
Securities case. 

Mr. Walker. In 1908, President Roosevelt brought two new suits 
under the Sherman law, one against the New York, New Haven & 
Hartford Railroad Co. for having acquired the Boston & Maine 
railroad, and one against the Union Pacific Railroad Co. for having 
acquired the control of the Southern Pacific. 

The Chairman. Mr. Walker, what the committee wished to get 
at from you was this point; whether the Sherman law in its opera¬ 
tion could reach conspiracies against trade entered into between a 
corporation in this country, and one in England or Canada. 

Mr. Walker. I am leading directly up to it, and I shall reach that 
point in not more than five minutes. President Roosevelt brought 
suit against the Union Pacific and Southern Pacific for an illegal 
combination; and almost at the same time he brought suit against 
the New York, New Haven & Hartford and the Boston & Maine rail¬ 
roads for illegal combination ; and those suits were pending at the end 
of his administration. 

Near the beginning of the administration of President Taft, he 
became pursuaded, as did his Attorney General, Mr. Wickersham, 
that the facts of the case in New England as between the Boston & 
Maine and the New York, New Haven & Hartford Railroad Cos. did 
not constitute any restraint of trade under the Sherman law. And 
in pursuance of that pursuasion he directed the Attorney General 
to withdraw, and the Attorney General did withdraw that suit. 
About the same time the Union Pacific people applied to President 
Taft to withdraw the Union Pacific suit, and those applications were 
based upon the same theory—and it was a plausible theory too— 
namely, that the competition that existed between the Union Pacific 
and the Southern Pacific was negligible and incidental and not 
essential, and that the competition between the New York, New 
Haven & Hartford and the Boston & Albany was incidental and not 
essential. Afterwards in the case of the Union Pacific road, two 
years after the New Haven case was withdrawn, the United States 
Circuit Judges, for Utah, four in number, decided that that view was 
the correct view, and that the competition between the Union 
Pacific and Southern Pacific was incidental, and therefore its sup¬ 
pression was nonviolative of the law. If that view of the law had 
been applied to the New York, New Haven & Hartford combination, 
perhaps the same result would have been reached. And it was on 
account of that view of the law, that the New York, New Haven & 
Hartford suit was withdrawn. 

But a week ago last Monday, I was in the Supreme Court chambers 
when the Supreme Court reversed the decision of the court below in 
the Union Pacific case; and held that the competition proved in 
that case, however small it might be in proportion to the magnitude 


182 X. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 

of the entire business of the two roads, was of such a character that 
its suppression constituted a violation of the Sherman law, and 
therefore that the two corporations must be divorced. 

Now I come to one exact point involved here. The moment 
that decision is applied to the New York, New Haven & Hartford 
consolidation with the Boston & Maine Railroad, the same conclusion 
must be reached, and the view Mr. Buckland intimated that that 
consolidation was an innocent one, ought to be revised by him in 
the light of the Union Pacific decision. With a thorough acquaint¬ 
ance of the facts of the two cases, and with a thorough acquaintance 
with the law, I wish to express to this committee my opinion that the 
moment the decision of the Supreme Court of the United States in 
the Union Pacific Co. case, is applied to the New York, New Haven 
& Hartford, and the Borton & Maine consolidation, the same result 
will have to be reached, and those two corporations must be divorced. 
How is that result to be reached ? There is no occasion for Congress 
to pass any new law to accomplish that result. It can be reached 
under the Sherman law, just as well as the Union Pacific divorce 
was reached under the Sherman law. And the circumstance that 
Attorney General Wickersham withdrew that suit is no obstacle to 
bringing a new suit for the same purpose, and pressing it forward 
under the view of the law which is now well established in the Union 
Pacific case. Therefore there is no occasion, for Congress to do 
anything 'towards promoting the divorce of the New York, New 
Haven & Hartford Co. and the Boston & Maine Railroad Co. 

In respect of the facts which have been brought before the com¬ 
mittee, and complained of, by the gentlemen who represent Provi¬ 
dence and Boston, relevant to the building or not building of the 
Southern New England Railroad by the Grand Trunk Railroad Co., 
I wish to make some observations which have not been made before. 

It appears to me that the cessation of the building by the Grand 
Trunk Railroad Co. in Massachusetts and in Rhode Island has not 
been due (or at least it is unprovable that it has been due) to any 
combination between that corporation and the New York, New 
Haven & Hartford Railroad Co. I think that if this committee 
investigates that question it will find that the New York, New 
Haven & Hartford Railroad Co. ardently desires that the Grand 
Trunk Railroad Co. shall not build those railroads, and in order to 
promote that desire, the New Haven company is proposing to the 
Grand Trunk Railroad Co. a joint contract which shall be so favor¬ 
able to the Grand Trunk Co. that it will not need or desire to build 
the New England extensions. If that turns out to be so, what can 
Congress do about it? Congress can do this about it, and nobody 
can do about it, what I am about to suggest, without new legislation. 

I hold this view: On the assumption of the truth and accuracy of 
the statements which have been made by the gentlemen here, the 
Grand Trunk Railroad Co. is being tempted to work a fraud on the 
State of Massachusetts and on the State of Rhode Island. The Grand 
Trunk Railroad Co. has fairly made a contract with those States; 
which contract provides that, under certain considerations, performed 
by the two States, the Grand Trunk Railroad Co. will build a railroad 
from Palmer to Providence, and one from Woonsocket to Worcester, 
and one from Woonsocket to Boston. 

Now, if the Grand Trunk Railroad Co. fails to do that, if it repu¬ 
diates its fair contract, then I hold that Congress has power to enact 


N. V., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 183 


a statute to prevent the Grand Trunk Railroad Co. from doing 
any business anywhere in the United States until it does perform 
that contract. Congress can do that, in pursuance of its power to 
regulate commerce among the several States and with foreign nations. 
I think it is perfectly undeniable that Congress has power to enact a 
statute, in general terms, but applicable to these facts, which would 
operate to say to the Grand Trunk Railroad Co., “You must carry 
out your contract with Massachusetts and Rhode Island; for if you 
do not do it, you will not be permitted to do any railroad business in 
Maine, Massachusetts, Vermont, New Hampshire, or anywhere else 
in the United States.’ 7 

Mr. Garrett. Mr. Walker, will you pardon me there a moment ? 

Mr. Walker. Yes, sir. 

Mr. Garrett. The corporate name of this concern is the South¬ 
ern New England, and not the Grand Trunk Railroad Co. 

Mr. Walker. I know that. I deem that immaterial; because it 
is the Grand Trunk Railroad Co. which has made its promise to the 
two States. The Grand Trunk Railroad Co. can perform that prom¬ 
ise through the Southern New England Railroad Co. or by any other 
instrumentality; but the Grand Trunk Railroad is bound in ethics 
and bound in morality to perform its contract with the State of 
Massachusetts and with the State of Rhode Island. It is competent 
for Congress if Congress, in its wisdom, sees fit to exercise that power, 
to enact a statute which shall make it obligatory upon the Grand 
Trunk Railroad to perform that contract, upon penalty of being 
excluded from the United States altogether. 

Mr. Garrett. Because it is a foreign corporation. 

Mr. Walker. That is right. Under the power to regulate com¬ 
merce between the several States and with foreign nations I have not 
the slightest doubt that Congress has that power. Now, if Congress 
has that power it can exercise it, and I know of no way—and I have 
studied the matter very carefully since I have attended these hear¬ 
ings yesterday and to-day—I know of no way short of that, or other 
than that, by means of which the wrong can be stopped, which the 
Grand Trunk Railway Co. is seeking to perpetrate upon Massachu¬ 
setts and Rhode Island. That wrong can not be stopped by any 
action of either of those States, because it relates to international com¬ 
merce and to interstate commerce. I do not believe that this is 
possible for our friends from Massachusetts and Rhode' Island to 
secure any redress for the wrongs of which they have complained to 
this committee, unless Congress will enact such a statute as I 
suggest. 

The Chairman. Mr. Walker, I find that some members of the 
commitee have imperative engagements, and they have just sug¬ 
gested to me that if you would file some additional views, the com¬ 
mittee would be much obliged, but we have to take a recess now on 
account of these imperative engagements-. 

Mr. Walker. This is a very suitable end to my remarks; because 
my suggestion of remedy—and the only remedy that I know of, for 
the wrongs complained of—is the principal thing I had to lay before 
the committee. 

The Chairman. I agree with you, and think you are correct about 
that. 

Thereupon the committee adjourned. 



184 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


[Statement of Lynn W. Wilson to the House Committee on Rules, favoring an investigation of the New 
York, New Haven & Hartford Railroad Co., as proposed in H. R.-by Mr. O’Shaunessy.] 

As of date of June 30, 1900. the New York. New Haven and Hartford Railroad Co. 
operated 2,056 miles of railroad in New York and New England. 

It reported, after paying dividends, a surplus for the year of $3,718,285.41. 

Upon May 31, 1907, the New Haven road merged “with and in the Consolidated 
Railway Co.,” a Connecticut corporation engaged in the street railway business, 
which had acquired some steamboats. 

As a result of this merger the capital stock of the New Haven road was immediately 
increased by more than $150,000,000. 

It must be understood that, after merging in and with the Consolidated Railway 
Co., the old New Haven road ceased to be. It had become a street railway corporation 
with large powers; virtually a holding company. 

But the new corporation kept the name “New York, New Haven & Hartford Rail¬ 
road Co. ” 

The effect of this merger was immediately shown in the income account of the new 
corporation. 

As of date of June 30, 1908, there was a deficit of $2,516,692.85. 

In two years a surplus of more than $3,000,000 became a deficit of more than $2,- 
500,000. 

Yet in 1908 the steam road, which had been the chief and almost sole property of 
the old New Haven company increased its income from operation by more than 
$3,000,000. 

What had happened? 

The profits from the conduct of the steam road business were being applied to pay 
interest and dividends on the vast amount of securities issued for “other properties. ” 

The steam road properties were rich. They had a monopoly of railroad transporta¬ 
tion over a large part of New England, but they were not productive enough to carry 
the dead weight of water, representing trollies and steam boats, that had been laid 
upon them. 

The steam road stock in 1906 was in the hands of a great many persons, including 
some widows, some orphans and some trust funds. 

Some of this steam road stock—the old New Haven—had been purchased as high 
as $208 a share. 

The effect of the merger was-to depreciate the value of this stock and it is sometime 
since it has commanded in the market $135 a share. 

Before the merger, the stock of the New Haven road was four times the debt. 

After the merger, the debt was double the stock. 

Today the New Haven company has attached to it more than 20 subsidiary com¬ 
panies. 

Some of these report in one State, some of them in another, some of them to the 
Interstate Commerce Commission and some of them to no public authority. 

The New Haven company has authority to issue stocks and bonds at its discretion 
and without public supervision. 

This power is given by its charter in Connecticut. 

This power is the source of the revenue by which it has been enabled to acquire 
its “other properties. ” 

It can continue to acquire “other properties” in the same way until the steam road 
property becomes bankrupt with the burden placed upon it, and the owners of the 
old steam road stock are entirely deprived of the values which formerly belong to 
them; unless public authority shall intervene. 

Remedies can not be properly applied without an investigation of the whole New 
Haven system and a consideration of its methods of finance and the merger of 1907, 
its objects and results. 

I suggest that supervision of issues of stock and bonds of this company—and all 
railroads—should be lodged with the Interstate Commerce Commission," with the 
right of appearance to interested persons. 

Had such supervision existed in some Federal tribunal it is unlikely that this com¬ 
pany would have been permitted to squander and dissipate the property of its steam 
roads in interstate commerce, by the purchase, at excessive prices, of trolley lines 
and steamboats. 

Unquestionably the effect of the merger of 1907 and other mergers of later date 
has been a monopoly of transportation by sea and land, as has been suggested by Mr. 
Norman White. 

But whether monopoly was the primary object of these financial arrangements, or 
whether the prime object was to leech from the rich New Haven steam roads their 
productive power, for the benefit of promoters of trolley roads and steamboat lines, 
is a matter for Congress to determine by suitable inquiry. 



N. Y v X. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 185 


It will suggest itself to your committee, that if monopoly was the prime object, 
that this monopoly was sought for the benefit of the steam road stockholders the holders 
of the stock prior to May 31, 1907. 

But, it appears, that the steam road stockholders were not benefited. Their great 
profits largely disappeared; their great surplus of more than $3,000,000 in 1906, be¬ 
came a deficit of more than $2,500,000 in 1908, although their steam lines had increased 
earnings more than $3,000,000 within this period. 

Their stock has decreased more than one-fourtli from its original value, and their 
equities are burdened with an enormous debt, which did not before exist. 

But if it is assumed that the managers of the steam road property desired to enrich 
the certain persons who owned the trolley lines and the steamboat companies, the 
merger of 1907 takes on a reasonable aspect. 

It must have benefited the owner of a share of trolley stock, purchased at a sum 
four or five times greater than the dividends upon that share warranted. 

It must have injured the steam road property to acquire such share upon those 
terms. 

It has injured the railroad property, as well as the railroad stockholders, as I have 
shown. 

It is not for the best interest of the people of the United States that any State should 
have power to issue charters to create monopoly, and which are virtually letters of 
marque to prey upon the commerce of other States. 

It is not good for the people of the United States that railroads in interstate commerce 
shall be leeched by a financial process until they are unable to perform properly the 
functions for which they were intended. 

There is a direct connection between the depleted financial condition of the New 
Haven steam road system and the many wrecks which have recently occurred upon 
its lines. 

No State has power to reach these conditions. The Federal Government has the 
power. I urge upon your committee the duty that you recommend the exercise of 
the Federal power for the improvement of these conditions. 

Respectfully, 

Lynn W. Wilson, 

Representative-elect to the General Assembly of Connecticut. 

Bridgeport, Conn., December 16 , 1912. 


House of Representatives United States, 

Committee on Patents, 
Washington, D. C., December 11, 1912. 
Mr. Chairman and Gentlemen of the Committee: 

I am not as familiar with these Grand Trunk and New Haven proceedings as many 
of those who have addressed the committee. The substantial well-known facts, how¬ 
ever, from which at least some deduction may reasonably be made, are as follows: 

These activities in Massachusetts are not in the old fourth district which I represent, 
but they rather are in the districts of Congressmen Gillett and Thayer, but the entire 
activities in Massachusetts, so far as the construction is concerned which has been 
stopped, are in the new third Massachusetts district in which I have been elected for the 
Sixty-third Congress. This district runs through the State from New Hampshire to 
Connecticut. Its east and west portion on the south includes the Boston & Albany 
Railroad from Springfield to Worcester, excluding only Wilbraham, and its line into 
Providence starts from Palmer, the next town east of Wilbraham and in the new 
third district, a map of which I present, and runs through Southbridge and other towns 
on the southerly end of the district. At various places they have done quite extensive 
work, and the way they have left it, it is a pretty bad looking mess. The damage is, 
of course, irreparable, for many arrangements have been made with property owners 
on the basis that the road is going through. They wouldn’t have had the places torn 
up anyway otherwise. . 

It is of course manifest that the Grand Trunk had a reason for beginning, which 
must have been an urgent one, inasmuch as it took some pretty strenuous activity 
in Massachusetts and, I understand, in Rhode Island, to obtain their right of way 
with the right of condemnation, and one can not well refrain from the belief that 
there is a snake in the grass or a nigger in the woodpile somewhere, and possibly 
both, yet we ought not perhaps to assume the doctrine of the celebrated Mr. Hennesy, 
who says that our criminal procedure in this country is that a man is “ guilty until 
he is proved to be guilty, and then he is innocent/’ Still there are two conclusions 
that seem to me normal and almost inevitable: First, that it is a matter that should 



186 N. Y. f N. H. & HABTEOED AND GBAND TEUNK E. E. AGEEEMENT. 

be looked into by a competent body, inasmuch as it doesn’t seem to be within the 
province of the Interstate Commerce Commission, because it is not a matter of railroad 
rates or administration, and second, it is an interstate problem, for it is in Massachu¬ 
setts and Rhode Island, and, indirectly, because of further announced plans and 



The New Third Congressional District 

HON. WILLIAM H. WILDER 

Republican Candidate for Renomination 

JUDSON I. WOOD 

74 Woodland Ave., Gardner, Mass. 

connections.of the Grand Trunk system, Connecticut, Vermont, and New Hampshire, 
and Congress is the only body that has the power to get at the facts and apply a remedy 
in the case, which the public are entitled to and in which they have such a vital 
interest. 


William H. Wilder. 











N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 187 


BRIDGEPORT ACCIDENT. 

[Report of H. W. Belnap, chief inspector of safety appliances to the Interstate Commerce Commission.! 

August 16, 1911. 

Interstate Commerce Commission, Washington , D. C . 

Dear Sirs: On July 11, 1911, train No. 72, Federal Express, eastbound, on the 
New York, New Haven & Hartford Railroad, was derailed near Bridgeport, Conn. 
The message reporting the accident was received by the commission the following 
morning. 

I was in New York City at the time and shortly after noon received a long-distance 
telephone communication from Commissioner McChord relative to the accident, and, 
realizing its magnitude and the importance of a thorough investigation, I immediately 
went to Bridgeport, arriving on the scene of the accident at 5 p. m., July 11, and had 
opportunity to look over the wreck and all the signals involved before very much of 
the wreckage had been removed and before the track had been repaired. It would 
have been impossible to have been on the scene of the accident as promptly had it 
not been that extra editions of the press contained reports of. the accident, which fur¬ 
nished the information on which we acted. 

A proper compliance with the order of the commission of June 21, 1911. requiring 
railroads to give notice by telegraph immediately after the happening of the accident 
would have placed such message in the office of the commission shortly after 9 a. m. 
on the morning of July 11, 1911. 

At 3.32 a. m., July 11, 1911, the eastbound Federal Express, known as train No. 
72, on the New York, New Haven & Hartford Railroad, consisting of engine 813; 
Department of Commerce and Labor Fish Commission car No. 4; Pennsylvania 
Railroad baggage car No. 5528; New York, New Haven & Hartford Railroad day 
coach No. 518; and six Pullman sleepers, was derailed, with the exception of the 
last two sleepers, at. the crossover known as Burr Road crossing, about 1^ miles 
west of Bridgeport, Conn. This derailment resulted in the death of the engineman, 
fireman, one employee not on duty, and 11 passengers, and the injury of 40 passengers, 
many of them seriously. The greater number of fatalities were in the day coach. 
Train No. 72 left Harlem River, its western terminal, at 1.52 a. m., 57 minutes late. 
The engine was in charge of Engineman Curtis and Fireman Ryan, and the train made 
11 stops between Harlem River and the place of the accident, which would indicate 
that the air brakes were in good working condition. 

After the derailment the engine and cars destroyed the south girder of an S5-foot 
span steel bridge that crosses Fairfield Avenue, ran along the ties and the ground 
until overturned, and were thrown down an embankment into the street below. The 
engine laid more than 400 feet from the point of derailment, which indicates the high 
speed at which the train was running at the time of the accident. 

This section of the New York, New Haven <k Hartford Railroad is equipped with 
controlled manual block signals, which the evidence and investigation show were in 
good working condition. Train movements are governed by the signals displayed 
and train orders are not used (except in case of moving a train against the current of 
traffic). The engineman can tell by the signal displayed which track his train will 
use, whether it shall stop, proceed on the same track, or diverge h) another track or 
route. From time to time, to facilitate the movement of trains, it is necessary that 
their route be changed from track to track as conditions of traffic require. These cross¬ 
over movements are directed by the train dispatcher, who notifies the tower signal 
man when he shall divert a train from one track to another. Train No. 72, with nine 
cars, was received by the dispatcher on this district on track No. 2, closely followed 
by fast mail train No. 34, with six cars, which was received on track No. 4, the inten¬ 
tion being fci train No. 34 to pass train No. 72, which it did before reaching Bridge¬ 
port, Train No. 72 had Department of Commerce and Labor Fish Commission car 
No. 4 to leave at Bridgeport, and to set out this car it was necessary that train No. 72 
be on track No. 4. Some 10 or 15 minutes prior to this accident the train dispatcher 
directed the operator at Burr Road tower to divert train No. 72 from track No. 2 to 
track No. 4. The accident occurred at this crossover, and the switches and signals 
governing the crossover had been set and locked for this train before its arrival to 
enable the train to leave track No. 2 and continue on track No. 4. 

This crossover is governed by semaphore signals which are in plain view of the 
engineman of an approaching train. In addition to these semaphore signals, a dwarf 
signal, located near the switch, indicates whether or not a crossing is to be made. 

The interlocking plant is not equipped with approach locking to prevent signalmen 
from changing the switches of a route while a train is closely approaching them. 
While all the evidence shows that the absence of approach locking did not in any way 
contribute to this accident, it might, in case of confusion of the signalman, result in 


188 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


trains being improperly diverted after switches and signals had been set for them to 
proceed on the mam track and might be the means of causing similar accidents. 

The New Haven roadbed in this locality is on a fill and carries four main tracks 
laid with 100-pound rail on stone ballast, very well constructed and maintained. 
Located on a tangent, bounded on the west by a 57-minute curve and on the east by 
Fairfield Avenue Bridge, 85 feet in length (through plate girders, tie floor), is a standard 
No. 8 double-slip ladder switch extending across all f ur tracks and installed to serve 
an important industrial track which leads, facing off track No. 4 east of Fairfield 
Avenue Bridge, to the street level, where manufacturing plants are located- The 
design and construction of the track, switches, movable points, frogs, and other appur¬ 
tenances of this slip-ladder switch, which is, in effect, a combination of a straightaway 
connection from track No. 3 clear across the four tracks to track No. 4 with three cross¬ 
overs between adjacent tracks, is good and substantial, and no portion of the track 
structure failed until after, and as a result of, the derailing of wheels of train. 

The rather scant difference in grade between Fairfield Avenue and the railroad 
track itself at Fairfield Avenue Bridge, and considerations of safety in case of damage 
to the structure by derailment (a street railway line crossing the right of way under 
this bridge) evidently led to the use of through girders rather than deck girders on 
this bridge and to the placing of girders between all tracks, which construction pre¬ 
vents the installation of crossovers on the bridge itself; and this means that the 
easterly end of any crossover located west of the bridge could not be farther east 
than the westerly line of the bridge'itself. The No. 8 double-slip ladder used takes 
up practically all the available tangent west of Fairfield Avenue Bridge; hence, any 
longer crossover would extend so far west as to compel its location partly on the curve 
west of the tower. The lowest numbered crossover that can be reasonably expected 
to carry trains safely at 60 miles per hour is an 18 or 20. If such crossovers were 
used in place of the No. 8 double-slip ladder, they would, of necessity, extend out 
onto the curve a distance of about 1,000 feet. When a crossover is located upon 
a curve having a given superelevation of the outer rail, one-half of the crossover 
will have this same superelevation in the right direction and the other half will have 
it in the wrong direction. On account of this superelevation in the wrong direction 
the likelihood of derailment in operating over crossovers located on curves is so 
great as to lead railroads to use every effort to locate their crossovers on straight 
track. 

The New York, New Haven & Hartford Railroad Co. restricts the speed of trains 
both by signals and by rule when taking crossovers. On one type of crossover, known 
as a straight crossover, the speed is restricted to 25 miles per hour or less; on another 
type, known as a slip crossover, such as was used at Burr Road, speed is restricted 
to 15 miles per hour or less. Time-card rule No. 2 reads as follows: 

“Trains while passing through slip switches must not run at speed to exceed 15 
miles per hour. 

“At crossovers, except where speed is restricted to less, no train must exceed a 
speed of 25 miles per hour while passing through crossover from one main track to 
another. ’ ’ 

In addition to this rule, train movements over these crossovers are governed by 
signals that indicate to the engineman the speed permitted while making the cross¬ 
over movement'. Crossovers on which a speed of 25 miles per hour is permitted 
are governed by high semaphore signals; crossovers on which a speed of but 15 miles 
per hour is permitted are governed by dwarf signals located on the ground near the 
switch points of such crossovers. 

The distant signal at Burr Road crossover was set at caution; the home signal was 
set at danger, and the dwarf signal was set so as to indicate to the approaching train 
that it was to cross over from track No. 2 to track No. 4. The distant signal is located 
2,187 feet west of the home signal. The home signal can be distinctly seen from 
the distant signal, but on approaching the crossover the view is obstructed for a 
short distance by a large tree until within about 1,000 feet of the home signal, from 
which point the view is clear again. The dwarf signal can be plainly seen a distance 
of more than 650 feet. 

Investigation shows that Mr. Curtis, the engineman; Mr. Ryan, the fireman; and 
Mr. Hemingway, the towerman, had none of them been on duty longer than the 
time permitted by the Federal statute. Mr. Curtis, the engineman, had been off 
sick with the measles in April, but had apparently entirely recovered, and he had 
reported and gone on duty some three weeks prior to this accident. The service 
records of all these employees are good, and they were considered thoroughly reliable 
and competent men. 

Mr. Curtis had been in the employ of the New York, New Haven & Hartford Rail¬ 
road Co. on this division since October, 1897. He was promoted to an engineman 
in November, 1904, had handled this particular train before, and had handled other 


In. Y v N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 189 


fast passenger and freight trains over this division. lie was familiar with the rules, 
tracks, and signals at the place of the accident. 

The accident was caused by the train crossing from track No. 2 to track No. 4 at a 
high rate'■of speed, estimated at between 55 and 60 miles per hour. 

Why the engineman should disregard both the signals and the rule governing 
this crossover, and not control the speed of the train while crossing from track No. 
2 to track No. 4, knowing that Department of Commerce and Labor Fish Commision 
car No. 4 was to be set out at Bridgeport, and this crossover was the only place left 
that such crossing from track No. 2 to track No. 4 could be made before reaching 
Bridgeport, is a question as to which there is now no evidence, and any attempted 
explanation would be a mere matter of conjecture. 

The distance the engine went after the derailment indicates unquestionably the 
high rate of speed of the train. This is fortified by the concurrence of the direct 
testimony of all witnesses. 

. High speed was permissible and safe if the train was to have continued on track 
No. 2. This speed, however, was manifestly dangerous when a crossover was to be 
made, as in the case of this train. 

The speed of the train was in the sole control of the engineman. If he knew that 
the crossover was to be made at this point, he should have reduced speed to 15 miles 
an hour or less. There is no direct evidence that he knew that the crossover was to 
be made at this point. He did know that the Department of Commerce and Labor 
Fish Commission car was to be left at Bridgeport. He was familiar with the tracks 
at this point and knew (hat this was the last crossover which would permit the train 
to reach track No. 4 before reaching Bridgeport. 

As he was approaching this point, even if he had no knowledge of the necessity of 
crossing over from track No. 2 to track No. 4, it still remains true that at the time 
he was within 2,200 feet of the point of derailment (if he was conscious) he must have 
realized from the signals which were displayed that he must either stop before passing 
the home signal or prepare to take the crossover, and that in using the crossover, by 
the rules and signals displayed, he must reduce his speed to 15 miies per hour or less. 

It is probable that if a No. 18 or 20 crossover had been used at this point, train No. 
72 would not have been derailed while passing over it at 60 miles an hour. It is, 
however, unreasonable to suppose that physical conditions will not frequently exist 
upon railroads where the use of such long crossovers is not practicable for the pur¬ 
pose of diverting trains from one track to another at maximum speed with safety, 
just as it is impracticable that any railroad should not have in its main track any 
curves over which trains might not be operated at maximum speed with the same 
safety as on straight track. Long crossovers are introduced primarily to save time in 
crossing over, as the speed reduction necessary to take short crossovers causes delay. 
As regards overturning, the same conditions apply to facing turnouts at junction 
points or leading into sidings or yards as apply to crossovers, but it is apparent that 
in entering sidings at high speed the danger from collision with cars standing on the 
siding is greater than the danger of derailment; hence the use of long turnouts for 
entering sidings would tend to eliminate a smaller percentage of accidents than would 
the use of long turnouts in main-line crossovers. While it is urged that as an extra 
precaution all crossovers used for diverting trains from one main track to another in 
the direction of traffic should be long enough to reduce to a minimum the risk of over¬ 
turning if they are taken at high speed, the proper thing to do is to prevent the high 
speed where it ought not to be used. This can be accomplished by the use of auto¬ 
matic train-control apparatus with proper speed-control features. From the present 
rate of progress being made in the development of such devices, it is apparent that it 
is going to be some time before railroads are thus equipped; and until such installa¬ 
tions are in use, railroads should require that whenever a train is to be diverted from 
one main track to another upon which the current of traffic is the same, at any cross¬ 
over less than, say, No. 18 or 20, the switches shall be left as set for the straight route, 
stop signals displayed, and crossover shall not be set for the diverging movement until 
after the train which is to make the movement has stopped. 

As a result of the investigation the following facts are disclosed: 

(1) This accident was caused by a disregard on the part of the engineman of signals 
and rules provided by the railroad company to prevent the occurrence of such accident. 

(2) The signals and rules provided by the railroad company for the prevention of 
such accidents were adequate had they been observed. 

(3) The tracks and switches were substantially constructed and safe for the train 
movement made had the rules been observed. 

(4) The interlocking and block signaling apparatus performed their intended 
functions and w T ere properly handled, though no approach locking was installed. 


1 ( J0 N. Y., N. H. & HARTFORD AND GRAND TRUNK R. R. AGREEMENT. 


(5) While the accident was due, as stated, to disregard by the engineman of the 
rules and signal indications, it is probable that the disastrous consequences of such 
disregard of rules and signals might have been prevented had it been reasonably 
practicable to have installed a No. 18 or No. 20 crossover instead of a No. 8 slip, and 
had same been used at this point. 

As a preventive of such accidents, it is recommended: 

(1) That in all situations where accidents are likely to occur through the non- 
observance by enginemen of signals or rules calculated to insure safety, automatic 
train-control apparatus should be provided to insure that trains will be brought to a 
stop in case the signals or rules are not properly observed. 

(2) That in the absence of such automatic control apparatus on tracks where high¬ 
speed trains are run switches should not be set to divert a high-speed train from 
one track to another at a crossover which is not safe for high speed until after the 
train has been brought to a stop. 

(3) That at all interlocking plants where trains are operated at high speed over 
facing switches approach locking should be provided to prevent the switches being 
changed from the main or through route to a diverging route after a train has received 
the signals for the through route. 

Respectfully submitted. 

H. W. Belnap, 

Chief Inspector of Safety Appliances 


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